Market watch: June 30

Oil futures prices surged Thursday on international markets as strong fundamentals of supply and demand prevailed.


Oil futures prices surged Thursday on international markets as strong fundamentals of supply and demand prevailed.

On the New York Mercantile Exchange, the August contract for a benchmark US blend of light, sweet crudes jumped 82� to $32.72/bbl. The September contract also was up 60� to $31.25. In after-hours electronic trading, the August contract retreated slightly to $32.68/bbl while the September contract advanced to $31.30.

As the day ended in Singapore, North Sea Brent crude for August was at $30.08/bbl, up by 7� on the day, but down by 31� for the week.

In London on the International Petroleum Exchange, the August contract for North Sea Brent gained 69�, closing at $30.80/bbl after trading as high as $30.95/bbl during the day. But the August contract for natural gas dipped 8� to the equivalent of $2.82/Mcf.

Refined petroleum products also showed significant gains on the NYMEX. The July contract for heating oil jumped 2.88� to 84.47�/gal, while the contract for unleaded gasoline rose 1.61� to $1.0505/gal.

The near-term contract for natural gas recovered a little of its previous loss, up 2.6� to $4.423/Mcf.

Energy futures showed declines in early trading Friday on the NYMEX, with natural gas down slightly to $4.42/Mcf; August oil, down 12� to $32.60/bbl; July heating oil, down 0.1� to 84.5�/gal; and gasoline, down 0.55� to $1.045/gal. The decline is thought to be due, in part, to an announcement by Norway that it plans to lift oil production curbs, increasing output by 100,000 b/d starting Saturday.

Norwegian Oil Minister Olav Akselsen said in a statement, "There seems to be a need for oil in the market. The [Norwegian] government has therefore resolved not to continue its production regulations into the third quarter."

Norway, which produces 3.2 million b/d, cut its oil production by 100,000 b/d in 1998, and then again in 1999, in response to production cuts agreed on by the Organization of Oil Exporting Countries in an effort to boost prices.

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