Sam Fletcher
Senior Writer
HOUSTON, Sept. 8 -- With no terrorist attacks on any oil facilities around the world over the long US Labor Day weekend and reassurances of supplies from the Organization of Petroleum Exporting Countries, crude prices continued to fall when the New York market reopened Tuesday.
In recent months, traders have been reluctant to hold an excess of open crude futures sales contracts over a long weekend for fear that sabotage of an oil facility might curtail supplies and push up market prices. Their pattern of unloading short positions on a Friday and, if no attacks occur, rebuilding such positions when the market reopens triggered Tuesday's decline, analysts said.
Energy prices
The October contract for benchmark US light, sweet crudes fell by 68¢ to $43.31/bbl Tuesday on the New York Mercantile Exchange, while the November position was down by 65¢ to $43.31/bbl. On the US spot market, West Texas Intermediate also dropped 65¢, to $43.35/bbl.
Gasoline for October delivery lost 2.73¢ to $1.18/gal on NYMEX. Heating oil for the same month retreated by 1.33¢ to $1.16/gal. The October natural gas contract, however, escalated by 11.5¢ to $4.79/Mcf, bounced back from the year's lowest price level by the threat of Hurricane Ivan. Described as the most powerful storm to hit the Caribbean in 14 years, Ivan pounded Granada on Tuesday and is expected to hit Jamaica before the week is out.
The category 4 hurricane "has already had a small effect on natural gas supplies by halting shipments from the largest exporter of LNG to the US market, Trinidad and Tobago's Atlantic LNG," said analysts Wednesday at Enerfax Daily.
"Natural gas futures have lost 18% of their value in the past month and are at levels not seen since November 2003, while physical gas prices on the Henry Hub went as low as $4.22[/Mcf] last Friday. Natural gas prices are off nearly 30% from their peak last May, but the potential exists for more downside in coming weeks, especially if there is not an early onset of cold winter temperatures," analysts said.
In London, the October contract for North Sea Brent crude inched up by 14¢ to $40.76/bbl Tuesday on the International Petroleum Exchange. Gas oil for September delivery dipped by 50¢ to $373.50/tonne, but the October natural gas contract gained 0.9¢ to the equivalent of $4.95/Mcf on IPE.
The average price for OPEC's basket of seven benchmark crudes lost 53¢ to $38.13/bbl Tuesday.
Contact Sam Fletcher at [email protected]
