Market watch, Sept. 28

Energy futures prices closed mixed in trading on the New York Mercantile Exchange Wednesday. Reactions to the American Petroleum Institute's weekly inventory report and the news of more oil to be released pulled the market in different directions.


Energy futures prices closed mixed in trading on the New York Mercantile Exchange Wednesday. Reactions to the American Petroleum Institute's (API) weekly inventory report and the news of more oil to be released pulled the market in different directions.

The November contract for benchmark light, sweet crudes declined by 4� to settle at $31.46/bbl, while the December contract stood at $31.39, up 2�.

Refined petroleum products also ended mixed on the NYMEX, with October home heating oil rising 1.81� to settle at 94.80� per gallon, while unleaded gasoline for the same month pulled back by 0.88� to rest at 92.12�.

NYMEX natural gas for October delivery lost 1.2� to settle at $5.31/Mcf.

Trading followed the pattern set by the weekly inventory report by the API, released after the end of Tuesday's session.

Home heating oil advanced, while gasoline took a dip, both as expected from their respective inventory situations during the previous week.

Crude traded higher during most of the session. However, traders took into account forthcoming increased production from the Organization of Petroleum Exporting Countries and oil from the Strategic Petroleum Reserve.

Although one member of the US Congress threatened to block the release of oil from the SPR, the market did not take much notice of this news.

In after-hours electronic access trading in New York, light, sweet crude was fetching $31.17/bbl for the November position and $31.15 for the December contract, both down from the NYMEX close.

Meanwhile, in London Wednesday, North Sea Brent crude oil futures rallied in line with gas oil, following the bullish US oil stocks' report, but ended the day little changed on the International Petroleum Exchange.

The API report showed an increased flow of crude from OPEC made little difference to US stock levels and might not help much to free up heating oil to consumers during the winter season.

Prices rallied back above $31/bbl, but fell steadily through the afternoon, brokers said.

The November contract for Brent crude on the IPE settled at $30.54/bbl, up by 12� from the previous close. The day's high was $31.27, and the low was $30.50.

Also in London, the IPE October natural gas contract closed at the equivalent of $3.41/Mcf, up 10�.

The market was pulled higher by gas oil, which settled sharply higher at $294.50/tonne, up by $4.75, in line with increases in NYMEX heating oil values. The day's high was $297.50, and the low was $289.50.

News that the International Energy Agency in Paris is to hold an emergency meeting to discuss the oil market and possible releases of inventories in Europe was seen as bearish and encouraged selling, coming as it did swiftly after the US decision to release some of its strategic oil reserve.

But the news in the market has been mixed. The possibility of reserves being released on the one hand and higher than expected inventories rumored among US distributors, and on the other, the API stocks report suggests that such releases may not succeed in bringing prices down.

Brokers predicted that futures would remain volatile in the near term.

On the Singapore Exchange, Brent crude for November went up 12� to $30.54/bbl, while the December contract was higher by 4� at $30.71.

The price of the OPEC basket of seven crudes stood at $29.18/bbl Wednesday, compared with $29.15 the previous day.

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