Market watch: Energy futures prices mixed
Energy futures prices were mixed Tuesday as international markets awaited confirmation of an expected increase in US oil and gasoline inventories. The July contract for benchmark US light, sweet crudes dipped 7¢ to $27.48/bbl on the NYMEX.
By the OGJ Online Staff
HOUSTON, June 20 -- Energy futures prices were mixed Tuesday as international markets awaited confirmation of an expected increase in US oil and gasoline inventories.
After the close of trading on the New York Mercantile Exchange, the American Petroleum Institute reported US oil inventories increased by 1.4 million bbl to a total 313.6 million bbl last week, with US gasoline stocks up 3.6 million bbl to 219.2 million bbl. Distillate fuel inventories also rose by 1.3 million to 108.8 million bbl, API reported.
Market fears of a possible spike in summer gasoline prices evidently have subsided. US Energy Secretary Spencer Abraham said Tuesday he sees no danger that gasoline prices would hit $3/gal this summer, provided no unforeseen circumstances develop.
The July contract for benchmark US light, sweet crudes dipped 7¢ to $27.48/bbl on the NYMEX, while the August contract lost 3¢ to $27.64/bbl.
However, home heating oil for July delivery increased by 0.34¢ to 77.44¢/gal, and unleaded gasoline for the same month gained 0.22¢ to 85.37¢/gal. The July natural gas contract advanced 4.2¢ to $3.98/Mcf on the NYMEX.
In London, North Sea Brent crude futures prices were little changed after Monday's plunge on the International Petroleum Exchange. The August Brent contract dipped 3¢ to $26.98/bbl. The July natural gas contract also slipped by 2.6¢ to the equivalent of $2.57/Mcf on the IPE.
The Royal Bank of Scotland, Edinburgh, reported Tuesday that UK oil production fell to 2.2 million b/d in April, down 3.4% from March and 10.4% below the same period a year ago.
UK natural gas production also dropped 4.4% for the same month. But on an annual basis, that production decline was only 1.9%, or 231 MMscfd.
Despite production declines, the value of UK oil production in April averaged $60 million/day, up 3.1% from the previous month and 11.9% for the year. Natural gas revenues were down 4% from the previous month, but up 4.4% from the same period in 2000.
As a result of that additional revenue, the bank reported operator investments are increasing in the North Sea. However, the bankers said that investment may be constrained by a lack of equipment and skilled workers.
"This could impact on the long-term competitiveness of the North Sea by increasing its costs of production relative to other locations," the report concluded.
The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes lost 46¢ Tuesday to $25.35/bbl.