By the OGJ Online Staff
HOUSTON, Feb.11 -- Energy futures prices rose on international markets Friday as traders chose to view quota agreements among the Organization of Petroleum Exporting Countries and outside producers as more filled than failed.
The International Energy Agency (IEA) reported Friday that OPEC cut production by less than half the 1.5 million b/d it agreed on and that Russia, instead of cutting output by 150,000 b/d (OGJ Online, Feb.8, 2002). IEA estimated that the 10 OPEC members who participate in quotas reduced production by 640,000 b/d in January. They produced 23 million b/d last month, 1.3 million bbl more than their new target, according to the report.
However, the level of compliance among OPEC members last month was more than the market expected. "Despite a continued build in US crude oil and product inventories, oil prices did gain some support from indications that OPEC, excluding Iraq, reduced output in January in an effort to meet its targeted reduction," Robert Morris, of Salomon Smith Barney Inc., reported Monday.
Meanwhile, Bijan Namdar Zangeneh, Iran's oil minister, said over the weekend that any decision by OPEC ministers on production quotas at the group's next meeting in March would be based on their assessment of market fundamentals of supply and demand.
The March contract for benchmark US light, sweet crudes gained 62¢ to $20.26/bbl Friday on the New York Mercantile Exchange. The April contract also increased 60¢ to $20.62/bbl. However, both positions declined in after-hours electronic trading to $20.11/bbl and $20.52/bbl, respectively.
Unleaded gasoline for March delivery jumped 1.8¢ to 58.77¢/gal Friday on the NYMEX. Home heating oil for the same month was up 1.4¢ to 53.34¢/gal.
The March contract for natural gas inched up 4.1¢ to $2.19/Mcf on the NYMEX. "Natural gas prices still confront an ominous year-over-year storage surplus while results from the largest public producers continue to confirm our assessment that domestic natural gas production dropped around 0.5% in the fourth quarter compared with the third quarter of last year," Morris said.
In London, futures prices for North Sea Brent oil moved a little higher on the International Petroleum Exchange as a result of reports of a mid-week explosion at Kuwait's Shuaiba refinery that triggered speculation of a possible reduction of gas oil exports to Europe. Officials later reported no real impact on exports was in evidence.
The March Brent contract gained 51¢ to $19.72/bbl Friday on the IPE. However, the natural gas contract for the same month dipped 0.8¢ to the equivalent of $2.56/Mcf.
The average price for OPEC's basket of seven benchmark crudes advanced 49¢ Friday to $18.69/bbl. For the full week, however, that basket price averaged $18.51/bbl, up from $18.30/bbl the previous week.
So far this year, OPEC's basket price has averaged $18.36/bbl, compared with an average $23.12/bbl for all of 2001.
