Market watch: Energy markets jittery awaiting Iraqi decision about UN resolution
Energy futures closed mixed on world markets Monday as traders awaited news from Iraq regarding its response on the United Nation's resolution demanding that Iraq disarm any weapons of mass destruction.
By OGJ editors
HOUSTON, Nov. 12 -- Energy futures closed mixed on world markets Monday as traders awaited news from Iraq regarding its response on the United Nation's resolution demanding that Iraq disarm any weapons of mass destruction.
Traders said the US market also awaited direction pending the American Petroleum Institute's weekly inventory report after trading closes Tuesday.
Meanwhile earlier Tuesday, Iraq's National Assembly voted unanimously to reject the UN's Security Council resolution. The final decision rests with Iraqi President Saddam Hussein, who has until Friday to say whether he intends to accept or reject the resolution demanding that UN weapons inspectors be allowed unrestricted access to locations suspected of producing weapons of mass destruction.
During Veterans Day holiday commemorations in Washington, DC, Monday, US President George W. Bush said, "I have no greater responsibility than protecting the American people. Should military action become necessary for our own security, I will commit the full force and might of the United States military, and we will prevail."
In its monthly Oil Market Report Tuesday, the Paris-based International Energy Agency called Iraq "the wild card" for the market.
Tyler Dann, analyst with Banc of America Securities LLC, said the Organization of Petroleum Exporting Countries "continues to feed the increasing hunger of the winter oil market."
"Lack of immediacy of conflict with Iraq and consistent overproduction by OPEC members has brought the crude price down off its recent highs and removed the near-term pressure for a quota increase at the organization's Dec. 12 meeting. Additionally, we are still hearing that OPEC generally, and Saudi Arabia in particular, stands at the ready with replacement barrels in the event that Iraqi production comes off the market," Dann said in a research note.
On Monday, the December contract for benchmark US light, sweet crudes rose 16¢ to $25.94/bbl on NYMEX, while the January contract rose 22¢ to $25.34/bbl.
Unleaded gasoline for December delivery dropped 24¢ to 71.04¢/gal. Heating oil for the same month was down 0.03¢ to 68.85¢/gal.
The December natural gas contract declined by 12.5¢ to $3.78/Mcf Monday on NYMEX.
In London, the December contract for North Sea Brent oil climbed 21¢ to $23.79/bbl on the International Petroleum Exchange. The December natural gas contract declined 0.43¢ to the equivalent of $3.77/Mcf on IPE.
OPEC's basket of seven benchmark crudes rose 9¢ to $23.71/bbl Monday.