Market watch: US-Iraq tensions push up oil futures prices
Energy futures prices generally continued to climb Friday, with sustained concern that Middle East oil supplies could be disrupted if the tension between the US and Iraq escalates.
By OGJ editors
HOUSTON, Aug.19 -- Energy futures prices generally continued to climb Friday, with sustained concern that Middle East oil supplies could be disrupted if the tension between the US and Iraq escalates.
Iraqi leader Saddam Hussein's call Friday for a dialogue between Iraqi and United Nations officials over weapons inspections was dismissed by most observers as yet another delaying tactic rather than any indication of a genuine intent to resolve that dispute. The threat of US military action against Iraq remains as strong as ever and has added at least $1/bbl to oil prices, analysts said.
The September contract for benchmark US light, sweet crudes gained 27¢ to $29.33/bbl Friday on the New York Mercantile Exchange. The October contract for that oil was up 13¢ to $28.51/bbl.
Heating oil for September delivery increased by 0.67¢ to 73.45¢/gal on NYMEX. However, unleaded gasoline for the same month dipped by 0.57¢ to 79.19¢/gal.
The September contract for natural gas inched up 2.2¢ to $3.15/Mcf in fairly light trading Friday. "The market traded sideways in a 2¢ range most of the day, dropping early but was then supported by rising crude oil futures and traders filling in weekend positions," analysts at Enerfax Daily reported Monday. "A supportive 53 bcf storage build reported Thursday by the (Energy Information Administration) got the rally started. The buying continued but lighter Friday, as many traders refused to go short before the weekend. Look for the market to dip back below $3(/Mcf) this week unless fundamentals change."
In London, the October contract for North Sea Brent oil settled at $27/bbl, up 15¢ for the day, after trading in a range of $26.69-27.20/bbl on the International Petroleum Exchange. The September natural gas contract gained 1.3¢ to the equivalent of $1.90/Mcf on the IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes increased by 24¢ to $26.58/bbl Friday. For the full week, however, OPEC's average basket price jumped 87¢ to $25.67/bbl.
So far this year, the basket price for OPEC oil has averaged $22.80/bbl, including an average price of $25.13/bbl during the month of July. That compares with an average price of $23.12 for all of 2001.