By the OGJ Online Staff
HOUSTON, Sept. 18 -- Energy futures prices fell Monday amid erroneous speculation that the Organization of Petroleum Exporting Countries was considering slashing the target price to $20-$22/bbl for its basket of seven crudes to support the battered US economy.
However, Adel K. Al-Sabeeh, Iraq's oil minister, claimed that speculation "is totally false." He said the issue has not even been raised by OPEC ministers, who are scheduled to meet Sept 26 in Vienna.
Traders also speculated that OPEC would rescind the 1 million b/d production cut that officially began Sept. 1. OPEC members have given no indication of doing that, although several energy ministers have indicated that they would provide world markets with sufficient oil supplies.
There were some technical difficulties as the New York Mercantile Exchange reopened on a modified schedule Monday for the first time since the Sept. 11 bombing of the World Trade Center. But those were quickly overcome, officials said.
The October contract for benchmark US light, sweet crude dropped 71¢ to $28.81/bbl Monday, down from closing prices resulting Friday from the first use of the NYMEX's new internet-based electronic trading system. The November contract also dropped 55¢ to $29.17/bbl.
Unleaded gasoline for October delivery fell 2.63¢ to 83.17¢/gal Monday, while home heating oil for the same month lost 2.2¢ to 80.7¢/gal.The October natural gas contract dipped 2.3¢ to $2.37/Mcf on the NYMEX.
In London, North Sea Brent crude futures plunged on the International Petroleum Exchange with fears that the US economy would be impacted adversely by last week's terrorist attacks.
The November Brent contract fell by $1.05 to $28.38/bbl after trading in a range of $28.35-$29.80/bbl Monday. The October natural gas contract inched up 0.4¢ to the equivalent of $3.08/Mcf on the IPE.
Brokers said oil prices are almost certain to spike higher, however, if the US carries out retaliatory actions against countries harboring the suspected terrorists.
OPEC's basket price fell 74¢ to $26.62/bbl Monday.
Meanwhile, the US Department of Energy has mobilized its forces to help prevent possible shortages of oil or refined products in this country. DOE officials are working with the US Coast Guard and local port officials to evaluate oil supplies and expedite unloading shipments of oil and products all along the East Coast.
Larry Goldstein, president of the Petroleum Industry Research Foundation Inc., New York, reported that stringent safety measures imposed last week by various East Coast port officials were slowing movement and unloading of oil and refined products in East Coast ports (OGJ Online, Sept. 14, 2001). He claimed that could cause artificial shortages that could run up fuel prices in some areas of the country.
DOE officials said they also are working with the US Corps of Engineers and the electricity industry on security matters and in efforts to restore power in New York City as quickly as possible.
