Market watch: Energy futures prices recoup some of previous loss
Energy futures prices rebounded Friday, recovering some of the previous day's loss.
By OGJ editors
HOUSTON, Aug. 5 -- Energy futures prices rebounded Friday, recovering some of the previous day's loss.
Meanwhile, Chakib Khelil, Algeria's energy minister, announced Saturday that he officially requested that the Organization of Petroleum Exporting Countries increase Algeria's production quota. Algeria's current quota is 693,000 b/d, but its production capacity is 1.1 million b/d, said Khelil.
That doesn't mean Algeria has any plans to cheat on its current production, he said. In a statement to the Algerian media, Khelil said, "We have always pleaded and we shall continue to plead for a consensus (that) involves all OPEC member states to ensure not only cohesion within the organization but also to guarantee stability of both the market and the prices for the mutual benefit of producers and consumers."
Algeria's request will be examined at a meeting of OPEC's board of governors later this month and presented at the full meeting of OPEC ministers scheduled for January. Many industry analysts already expect OPEC to increase its production quotas at that meeting in order to satisfy an expected increase in world demand for oil during the final quarter of this year.
Others also are coordinating future energy plans. US Energy Sec. Spencer Abraham met in Moscow with Russia's Energy Minister Igor Yusufov and officials from the largest Russian oil companies to promote stronger cooperation on oil issues and to discuss the upcoming oil and gas summit meeting scheduled for October in Houston.
Abraham announced that the US will fund an analysis of the oil and gas potential off eastern Siberia to help determine which of Russia's offshore arctic basins offers the greatest opportunity for development. That analysis is part of the US Geological Survey's continuing arctic resource assessment.
The September contract for benchmark US light, sweet crudes gained 37¢ to $26.84/bbl on the New York Mercantile Exchange. The October contract increased by 28¢ to $26.34/bbl.
Unleaded gasoline for September delivery was up 1.26¢ to 77.48¢/gal. Heating oil for the same month added 0.46¢ to 67.66¢/gal. The September natural gas position inched up 1.6¢ to $2.86/Mcf.
"The market spent Friday morning on a steady climb higher, (bounced)ing off $2.90(/Mcf) in the early afternoon, and slipped lower until close. A breakout below the $2.78(/Mcf) support level would renew this summer''s decline and could lead to a test of March''s gap crossing at $2.71(/Mcf) later this month," Enerfax Daily reported Monday.
In London, futures prices for North Sea Brent crude rallied above $25/bbl, largely on short-covering by brokers who, uncertain over possible conflict between the US and Iraq, did not want to leave themselves vulnerable to a sudden price escalation over the weekend. The September Brent contract increased by 30¢ to $25.31/bbl on the International Petroleum Exchange.
The September natural gas contract dipped by 1.1¢ to the equivalent of $2.03/Mcf on the IPE.
The average price for OPEC's basket of seven benchmark crudes gained 5¢ to $24.83/bbll on Friday. For the full week, however, the average basket price was down 20¢ to $24.98/bbl.
So far this year, OPEC's basket price has averaged $22.65/bbl, compared with an average of $23.12/bbl for all of 2001.