By the OGJ Online Staff
HOUSTON, July 24 -- Oil futures prices rose Monday with continued speculation that the Organization of Petroleum Exporting Countries may decide on a third production cut next month.
Traders' expectations seem to be developing in that direction despite no clear indications from OPEC members. But many of the major players remained on the sidelines Monday as the market climbed on low volume. That raised doubts about the depth of the rally, some analysts said.
Meanwhile, BP PLC said it is suspending oil exploration in a disputed area of the Caspian Sea where an Iranian warship allegedly threatened an Azerbaijani drillship Monday night. The drillship, which was moored some 93 miles southeast of Azerbaijan's capital Baku, returned to shore as ordered by Iranian officials, sources reported.
Azerbaijan Prime Minister Artur Rasi-zade reportedly summoned Ahad Gaszi, Iran's ambassador to that country, to a meeting over that incident.
The September contract for benchmark US sweet, light crudes gained 18¢ to $26.12/bbl Monday on the New York Mercantile Exchange, while the October oil contract added 13¢ to $25.83/bbl. Home heating oil for August delivery inched up 0.28¢ to 68.39¢/gal, but unleaded gasoline for the same month dropped 1.06¢ to 71.32¢/gal.
The August natural gas contract advanced 2.3¢ to $2.98/Mcf on the NYMEX. However, a sagging US market for natural gas forced Raymond James & Associates Inc., Houston, to reduce its third quarter gas price forecast to $2.75/Mcf Monday from $3.25/Mcf previously. The anticipated boost in gas-fired summer power demand is "simply not showing up," said Marshall Adkins, energy analyst for the company (OGJ Online, July 23, 2001).
In London, prices for North Sea Brent oil futures also increased Monday, but fell back from the day's highs near the close of the International Petroleum Exchange. The September contract for Brent crude settled at $24.92/bbl, up 28¢ for the day after trading in a range of $24.75-$25.18/bbl. The fact that contract closed below $25/bbl might trigger additional selling today, analysts said.
The August contract for natural gas also gained 1.4¢ to the equivalent of $2.79/Mcf on the IPE.
The average price for OPEC's basket of seven crudes was up 57¢ Monday to $23.50/bbl.
