MARKET WATCH: Crude prices continue down, natural gas dips

Crude oil prices fell Sept. 23 on New York and London markets while analysts and traders awaited speeches at the United Nations, where Iran seeks improved relations with the West in hopes of ending an international embargo on Iranian oil sales and loosening other sanctions.

Meanwhile, natural gas prices in New York settled at the lowest price since Sept. 6 while gasoline futures touched their lowest level since December 2012.

US President Barack Obama and Iranian President Hasan Rouhani each were scheduled to speak Sept. 24 to the UN although the two had not scheduled any direct meeting. Meanwhile, US Sec. of State John Kerry will meet Sept. 26 with Iranian Foreign Minister Javad Zarif.

Iran suggests that it is willing to cooperate on resolving issues regarding its nuclear program. Concerns about possible nuclear weapons prompted US and European Union sanctions, cutting Iran’s oil sales and revenues. Iran said its nuclear program is for power generation.

Elsewhere, Saudi Arabia and Kuwait reassured market participants that Middle East near-term oil supplies will be adequate to meet world demand.

Kuwait’s Oil Minister Mustafa al-Shamali said Kuwait currently produces 3.2 million b/d. That figure exceeds the International Energy Agency’s estimate of August production of less than 2.8 million b/d.

Saudi Oil Minister Ali al-Naimi said that “supplies are adequate and inventories are excellent.” He believes that Saudi Arabia can meet any additional crude oil demand, but he gave no production figures.

Energy prices

The November contract for benchmark US light, sweet crudes on the New York Mercantile Exchange dropped $1.16 on Sept. 23, settling at $103.59/bbl. The December crude contract fell 99¢ to settle at $102.72/bbl.

Heating oil for October delivery dropped 4.8¢ to $2.95/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for October declined 6.1¢ to a rounded $2.62/gal.

The October natural gas contract was down 8.5¢ to a rounded $3.60/MMbtu on NYMEX. On the US spot market, the gas price at Henry Hub, La. was $3.65/MMbtu, a 2.9¢ decrease.

Analysts blamed the NYMEX gas price drop on a mild weather outlook and a seasonal demand lull.

In London, the November IPE contract for North Sea Brent crude declined $1.06 to $108.16/bbl. The October contract for gas oil settled down $12.25 to $913/tonne.

The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes fell 82¢ to $106.52/bbl on Sept. 23.

Contact Paula Dittrick at paulad@ogjonline.com.

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