By OGJ editors
HOUSTON, Aug. 26 -- Energy futures prices for oil, natural gas, and petroleum products continued to fall Friday while traders cashed in on gains earned on the market's recent sharp rise.
Oil markets in London and New York in particular have fluctuated greatly over the past several weeks amid speculation of a possible attack by the US on Iraq, therefore adding a "war premium" to the price of oil. One analyst said, however, that there should be no war premium and that oil markets should be actually discounting oil prices.
"Simply put, if the US invades Iraq, the most likely impact upon global oil markets would be substantially greater Iraqi oil supplies within a fairly short period of time," said Marshall Adkins, analyst with Raymond James & Associates Inc. in Houston. "While there are some very obvious wildcards that could affect the timing of this additional Iraqi production (amount of infrastructure damage, length of war, collateral damage), the odds are very much in favor of substantially more Iraqi oil hitting world markets if Saddam Hussein is removed from power."
In New York Friday, the October contract for benchmark US light, sweet crudes dropped 21¢ to $28.63/bbl on the New York Mercantile Exchange, while the November contract fell 10¢ to $28.21/bbl. Heating oil for September delivery lost 0.9¢ to 73.9¢/gal Friday, while unleaded gasoline for the same month's delivery settled at 79.52¢/gal, down 0.14¢.
The September natural gas contract fell as well Friday, settling at $3.49/Mcf from Thursday's close of $3.52/Mcf.
Meanwhile, in London, the October contract for North Sea Brent oil lost 3¢ to $26.99/bbl on the International Petroleum Exchange. The September natural gas contract fell as well, reaching the equivalent of $1.93/Mcf, off 1.6¢ on the IPE.
The price of the Organization of Petroleum Exporting Countries' basket of seven crudes was down 35¢ Friday, settling at $26.43/bbl.