By the OGJ Online Staff
HOUSTON, Mar. 14�Energy futures prices slumped on international markets Tuesday as traders wait to see what the Organization of Petroleum Exporting Countries will do when it meets Friday.
Most assume OPEC members will agree to reduce production. The only uncertainty is how much.
An anticipated reduction of at least 500,000 b/d has already been factored into current oil futures values, analysts said. If OPEC is to boost oil prices, they said, it would have to cut production by 1 million b/d.
After the close of trading Tuesday on the New York Mercantile Exchange, the American Petroleum Institute reported an increase of 9.5 million bbl in US oil inventories during the past week. However, distillate stocks, including home heating oil, were down by 544,000 bbl and gasoline stocks dropped by 4.2 million bbl.
The April contract for benchmark US sweet, light crudes lost 41� to $27.59/bbl Tuesday on the NYMEX, while the May contract retreated 43� to $27.83/bbl.
Home heating oil for April delivery dipped 0.26� to 72.9�/gal, while unleaded gasoline for the same month declined 0.66� to 88.62�/gal. The April natural gas contract fell 15.3� to $5.01/Mcf.
API also reported Tuesday that US gasoline pump prices continued to fall last week to an average $1.412/gal. It was the fourth consecutive week that average gasoline prices have declined nationwide, despite a slight uptick last week in oil prices that constitute about 70% of the pretax price of gasoline.
With world supply and demand for oil already in tight balance, crude prices are expected to remain elevated. The US imported more than 56% of its total petroleum needs last year and remains dependent on world oil markets represented by OPEC.
API said US government regulations also have boosted prices by reducing the flexibility of the refining and distribution system to handle the transition to reformulated gasolines.
In London, the April contract for North Sea Brent crude dropped 62� to $25.28/bbl Tuesday on the International Petroleum Exchange. But the natural gas contract for the same month gained 8� to the equivalent of $3.30/Mcf.
