Energy futures prices generally dipped slightly on international markets Monday as participants took profits from Friday�s run up. Technical traders also were active during the day.
The February contract for benchmark US light, sweet crudes was unchanged at $32.19/bbl on its last day of trading on the New York Mercantile Exchange, with none of the volatility usually associated with the expiration of a contract. Analysts said resumption of Iraq�s crude exports from a terminal in Turkey after 3 weeks of suspensions had a bearish influence on the market.
However, the March contract for US benchmark crudes lost 39� to $29.80/bbl. That price continued to slide in after-hours electronic trading to $29.63/bbl for March, with the April contract at $28.86/bbl.
Home heating oil for February delivery dipped 0.03� to 87.93�/gal on the NYMEX, while the February contract for unleaded gasoline declined 0.48� to 87.64�/gal. Natural gas for the same month lost 0.2� to $7.46/Mcf.
In London, the March contract for North Sea Brent crude closed at $26.53/bbl on the International Petroleum Exchange, down 51� for the day after trading as high as $27.28/bbl Monday.
Participants said Brent futures apparently are trying to consolidate around $26.50/bbl on the London market. Brent prices in excess of $27/bbl were overdone, they said, despite recent strong demand resulting from severe winter weather in the US and Europe.
The February natural gas contract was down 6� to the equivalent of $3.97/Mcf on the IPE.
Monday, the average price of the Organization of Petroleum Exporting Countries� basket of seven crudes jumped another $1.07 to $26.09/bbl.
In his weekly radio program, Venezuelan President Hugo Chavez said OPEC�s recent decision to reduce its production �was a necessity, and we will continue attentive to the daily movement of the price of crude on world oil markets.�
While US Energy Secretary Bill Richardson was making an unsuccessful eleventh-hour effort to talk OPEC leaders into sustaining high production, Chavez was meeting with the heads of government of OPEC members to hammer out agreements for a 1.5 million b/d reduction. The cut would lower output to 25.2 million b/d.
The export price of Venezuela�s oil basket last week closed at �almost $23/bbl� above the lower end of the OPEC price band. Venezuela�s national budget for this year is based on an oil export price of $20/bbl.
However, Chavez said, �For us, an average of $25/bbl in the year is a fair average for our oil.�
