Market watch: Gasoline concerns boost energy futures

April 10, 2001
Concerns over another summer of possibly tight US gasoline supplies helped boost energy futures on international markets Monday, wiping out most previous losses. On the New York Mercantile Exchange, the May contract for unleaded gasoline jumped by 2.2� to 99.12�/gal.


By the OGJ Online Staff

HOUSTON, Apr. 10 -- Concerns over another summer of possibly tight US gasoline supplies helped boost energy futures on international markets Monday, wiping out most previous losses.

Refinery problems that have slowed gasoline production seemed to fan fears of inadequate inventories ahead of the summer driving season. Traders apparently believe a projected slowdown in the US economy will not trigger a respondent drop in gasoline demand.

The US Energy Information Agency last week predicted US retail gasoline prices will average $1.49/gal this summer, down from last year�s average of $1.53/gal but still the second highest level on record.

On the New York Mercantile Exchange, the May contract for unleaded gasoline jumped by 2.2� to 99.12�/gal Monday. Home heating oil for the same month increased 0.75� to 73.58�/gal.

Benchmark US sweet, light crude for May delivery gained 22� to $27.28/bbl, while the June contract rose 21� to $27.59/bbl. Both contracts continued to increase in after-hours electronic trading to $27.46/bbl and $27.65/bbl respectively.

The May natural gas contract was up 8.9� to $5.48/Mcf on the NYMEX.

In London, North Sea Brent crude for May closed at $25.28/bbl, up 11� for the day, after trading in the range of $25.08-$25.58/bbl Monday on the International Petroleum Exchange.

Analysts said that market appears to be consolidating around $25/bbl, with no data to support a �more convincing� rally beyond $25.50/bbl. However, a bearish turn in the market before the Easter holidays could break support for $25/bbl, they said.

The UK is second only to Norway among European oil producers. But legislation being drafted by European Union executives in Brussels could put the UK�s entire North Sea oil reserves into a central European pool during an emergency, officials said Tuesday.

That proposed legislation would require equal sharing of oil reserves among European Union members during an energy emergency. However, the proposal has sparked opposition in the UK.

The May natural gas contract gained 4� Monday to the equivalent of $3.27/Mcf on the IPE.

The Organization of Petroleum Exporting Countries� basket of seven crudes increased by 33� to $23.87/bbl Monday.