By OGJ editors
HOUSTON, Sept. 26 -- Energy futures prices retreated Wednesday, as traders used improved weather in the Gulf of Mexico and higher US gasoline inventories as an excuse to take profits after days of steady market gains.
Concerns about a possible armed conflict between the US and Iraq continued to buoy market prices at high levels, however, analysts said.
Unleaded gasoline for October delivery fell 1.23¢ to 81.69¢/gal Wednesday on the New York Mercantile Exchange. That contract lost a total of 2.58¢ in trading sessions Tuesday and Wednesday, after a gain of 2.86¢/gal on Monday.
The American Petroleum Institute reported late Tuesday that US gasoline stocks last week jumped by 4.2 million bbl to 209 million bbl in the biggest weekly increase since January (OGJ Online, Sept. 25, 2002).
However, API also said in a separate report this week that, despite little year-on-year change in gasoline prices and only moderate growth in personal income, US gasoline deliveries rose more than 3% in August, compared with the same period in 2001 when the increase was relatively weak.
US gasoline deliveries, a key measure of demand, have averaged a 3% growth rate so far this year, API reported. The last full year in which gasoline deliveries rivaled that growth rate was in 1998, API officials said.
The November contract for benchmark US sweet, light crudes lost 13¢ to $30.64/bbl Wednesday on NYMEX, while the December position was down 16¢ to $30.29/bbl. The October heating oil contract dipped 0.07¢ to 80.63¢/gal.
The expiring October natural gas contract plunged 24.8¢ to $3.49/Mcf Wednesday "in a mix of option-related selling and liquidating the hurricane premium" said analysts at Enerfax Daily.
The US Energy Information Administration reported early Thursday that 67 bcf of natural gas was injected into US underground storage last week, down from 69 bcf last week and 93 bcf during the same period last year.
Injections this week are likely to be much lower said Enerfax Daily analysts, with the US Minerals Management Service reporting 13.5 bcfd of gas, 90% of total Gulf of Mexico gas production, shut in ahead of Tropical Storm Isidore. MMS also reported 1.4 million b/d of gulf oil production has been shut in.
US gas storage now stands at 2.99 bcf, with surpluses of 134 bcf year-over-year and 299 bcf compared with the 5-year average.
In London, the November contract for North Sea Brent oil lost 5¢ to $29.06/bbl on the International Petroleum Exchange. The October natural gas contract slipped 0.3¢ Wednesday to the equivalent of $2.72/Mcf on the IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes lost 22¢ to $28.19/bbl, still above the group's targeted price range.