Energy futures prices fell in trading on the New York Mercantile Exchange (NYMEX) Friday. Profit-taking ahead of the weekend caused the market to slip. Traders were reluctant to hold positions over the weekend after the market's significant gains during the week. Uncertainty about the Organization of Petroleum Exporting Countries' meeting on Wednesday was also a factor.
Light sweet crude pulled back by 62� to rest at $32.33/bbl for July delivery, while the August contract stood at $30.02, down by 93�.
Speculation by traders, rather than a tight market, is responsible for the recent rise in oil prices, according to Qatari Energy and Industry Minister Abdullah Bin Hamad Al Attiyah.
Speaking to reporters in Doha, he said the Wednesay meeting of OPEC oil and energy ministers in Vienna Wednesday would primarily try to achieve stability in the market, rather than address output quota revisions.
"The fluctuations in oil prices are subject to several factors, including speculation, stockpiling, and saturation. These factors will be considered during OPEC's meeting," he stated.
Most market participants believe OPEC will announce some sort of production increase at its meeting Wednesday. News of the US release of oil from its Strategic Petroleum Reserve to two refineries was also bearish for gasoline.
Prices slip
Adding to the bearish sentiment for gasoline prices was the announcement US President Bill Clinton has asked the Federal Trade Commission to investigate the sharp rise of gasoline prices in the Midwest.
Retail prices of gasoline have reached $2/gal in that region and many believe it is not because of the supply and demand situation.
Refined petroleum products closed lower on Friday, with July home heating oil giving back 3.20� to settle at 74.24�/gal, while unleaded gasoline for the same month declined by 2.25� to rest at $1.0655.
However, NYMEX natural gas for July delivery advanced by 2.5� to end at $4.49/Mcf of gas.
In after-hours electronic access trading in New York today, light sweet crude was fetching $31.91/bbl for the July position and $29.66 for the August contract, both down from the NYMEX close.
Meanwhile, in London Friday, North Sea Brent crude oil futures fell heavily, but closed above $28/bbl on the International Petroleum Exchange (IPE), after a couple of days of profit-taking-related losses.
Brokers said the market would probably hold at around the $28/bbl mark until OPEC ministers reached a decision on whether or not to raise the group's output ceiling for the third quarter.
They said that, fundamentally and technically, crude futures looked steady and firm, adding that prices were likely to dip if OPEC decided to boost output by more than one million b/d. But by the end of last week, there were no fresh clues as to the organization's likely decision.
On Friday, IPE August Brent futures settled at $28.35/bbl, down by $1.04 from Thursday's settlement. Today, IPE August Brent futures were being traded at $27.90/bbl, down by 45� from Friday's settlement.
Also on the IPE, gas for July delivery settled at the equivalent of $2.46, down 15�.
The price of North Sea Brent crude oil slipped on the Singapore exchange today, in line with the weaker tones set by the New York and London energy exchanges on Friday.
As the day ended, Singapore Brent for August delivery fell by $1.23 to close at $27.95/bbl, after touching the day's high of $28.
Likewise, September Brent was also soft at $27/bbl, though the traders said prices were still on the high side, as oil consumers were looking for a $22-23 price.
The price of the OPEC basket of seven crudes stood at $28.50/bbl Friday, compared with $29.55 the previous day, according to OPEC Secretariat calculations.
According to figures released by the OPEC Secretariat, the price of the basket so far this year (up to June 15) has averaged $25.98/bbl.
In May, the basket price averaged $26.94/bbl, as opposed to $22.93 in April, and $26.71 in March. For the first quarter of 2000, the basket price averaged $26.11/bbl, compared to $23.42 in the fourth quarter of 1999.
