By the OGJ Online Staff
HOUSTON, Jan. 4 -- Energy futures prices fell Thursday in international markets with negative news that a global economic recession may be even worse than originally expected, resulting in an even greater decrease in world demand for oil.
Market confidence will be restored only by a convincing demonstration that members of the Organization of Petroleum Exporting Countries and some major nonmember producers are sticking to their promised production cuts over the next few months, said some analysts. Oil production levels and exports among those countries will be watched intently.
The February contract for benchmark US light, sweet crudes dropped 64¢ to $20.37/bbl Thursday on the New York Mercantile Exchange. The March position also fell 59¢ to $20.64/bbl. In after-hours electronic trading, however, both contracts regained some of that loss to $20.70/bbl and $20.94/bbl, respectively.
During the regular NYMEX trading session Thursday, home heating oil for February delivery plunged 1.86¢ to 56¢/gal, wiping out most of the previous day's gain. Unleaded gasoline for the same month lost 0.61¢ to 60.45¢/gal. The February natural gas contact also fell 19.7¢ to $2.27/Mcf.
In London, futures prices for North Sea Brent oil slipped in afternoon trading on the International Petroleum Exchange, as traders perceived bearish indicators in the American Petroleum Institute's weekly report of US petroleum inventories.
That report, released late Wednesday after the markets closed, showed mostly declines in US stocks of oil and unleaded gasoline. However, traders noted that US inventories as a whole remained at higher levels than at the beginning of last year.
The February contract for Brent lost 34¢ to $20.66/bbl Thursday. However, the February natural gas contract inched up 0.88¢ to the equivalent of $4.16/Mcf on the IPE.
The average price for OPEC's basket of benchmark crudes dipped 3¢ to $18.82/bbl Thursday.
