Sam Fletcher
Senior Writer
HOUSTON, Mar. 7 -- Futures prices for oil and petroleum products advanced Thursday as traders awaited a television press conference by President George W. Bush, scheduled after the close of trading sessions.
During his news conference, Bush said he would ask the United Nations Security Council for another vote next week on whether to declare Iraq in violation of arms restrictions. He again indicated that the US might take action even without UN approval.
The April contract for benchmark US light, sweet crudes gained 31¢ to $37/bbl Thursday on the New York Mercantile Exchange, while the May contract increased by 58¢ to $35.54/bbl. Heating oil for April delivery jumped by 1.17¢ to $1.0556/gal. Unleaded gasoline for the same month was up 0.51¢ to $1.106/gal.
Venezuela production
Meanwhile, Venezuelan Energy Minister Rafael Ramirez said his country soon would be producing 2.8 million b/d of oil, its production quota assigned by the Organization of Petroleum Exporting Countries.
In an interview with state news agency Venpres, Ramirez said, "We are sure that we are going to recover national production during the first half of this month to its normal level of about 3 million b/d, which will allow us to reestablish the production quota set by the organization.
He said, "We are recovering our oil production in a sustained fashion. Currently, it is above 2.5 million b/d and within hours will be at 2.8 million b/d, which means that we will be at the required level for the internal market, where gasoline production is at 60%, but additionally will allow us to strengthen exports."
However, the US Energy Information Administration this week estimated that Venezuela's oil production could increase to 1.8 million b/d by the end of this month, up from a production average of 1.4 million b/d in February.
EIA also predicted that OPEC might suspend production quotas for its other members if military action disrupts Iraq's oil production.
Iraqi production
UN officials meanwhile reported Iraq's oil exports increased to 1.9 million b/d during the week ending Feb. 28, up from 1.7 million b/d the previous week under the UN supervised oil-for-aid program. The price for that oil also increased by 15¢ to $28.70/bbl.
However, the 4-week average for Iraqi oil exports fell to 1.73 million b/d, officials said.
Due to a cumulative shortfall of $4.5 billion in Iraq's oil revenue, largely as a result of self-imposed stoppage of oil exports during disputes with UN officials, 2,389 humanitarian supply contracts have been approved by the UN but remain unfounded.
Other prices
The April contract for natural gas lost 17.7¢ to $6.84/Mcf Thursday on NYMEX. That market "remains perched on the edge of winter, with continued cold in the Northeast and thinning storage levels holding up next-day cash prices.
"But traders expect to see short covering today ahead of the weekend and a possible war on the horizon," analysts at Enerfax Daily reported Friday. That buying might bring the April gas contract back above $7/Mcf, they said.
"Meanwhile, despite the strength in natural gas prices, we do not expect a significant up tick in US LNG imports near term, due primarily to the limited availability of LNG tankers for spot trade," said Robert Morris, Salomon Smith Barney Inc., New York, in a report Thursday.
US imports of LNG have been limited also by recent shutdowns of nuclear plants in Japan after Tokyo Electric Power Co. admitted to falsifying maintenance reports at its nuclear plants. Authorities ordered all 17 of the company's nuclear plants to be shut down by April for inspections; 13 have already shut down.
In London, the April contract for North Sea Brent oil gained 53¢ to $33.53/bbl Thursday on the International Petroleum Exchange. The April natural gas contract, however, lost 4.4¢ to the equivalent of $2.93/Mcf on IPE.
The average price for OPEC's basket of seven benchmark crudes gained 21¢ to $32.50/bbl Thursday.
Contact Sam Fletcher at [email protected]
