Market watch: Oil futures prices rise as Iraq again rejects weapons inspectors
By OGJ editors
HOUSTON, Sept. 16 -- Energy futures prices jumped Friday after Iraq rejected demands for the unconditional return of United Nations weapons inspectors, signaling an escalation of political tensions in the Middle East.
Markets also were impacted by indications that the Organization of Petroleum Exporting Countries will retain current production quotas at its ministerial meeting scheduled this Thursday in Osaka. That pending meeting will likely influence the market most of this week, as the almost evenly divided OPEC members work out an agreement on production, analysts said.
An industry move to shut down some offshore operations in the Gulf of Mexico in the path of a developing tropical storm was another factor influencing futures trade Friday.
Both the October and November contracts for benchmark US light, sweet crudes jumped by 96¢ to $29.81/bbl and $29.99/bbl, respectively, on the New York Mercantile Exchange. Heating oil for October delivery shot up 2.09¢ to 78.67¢/gal, while unleaded gasoline increased by 2.02¢ to 80.56¢/gal.
The October natural gas contract gained 13.8¢ to $3.47/Mcf on NYMEX. That market was "spooked by Tropical Storm Hanna in the Gulf of Mexico," as the US Minerals Management Service "reported a minimal number of shut-ins as companies focused on pulling nonessential personnel from offshore platforms in Hanna's path," analysts at Enerfax Daily reported Monday. "The market opened higher on the news that companies had pulled personnel off rigs in anticipation of Hanna, and traded more or less sideways all day. Trade spiked the market early, but the trade buying soon dried up with locals going long and speculators liquidating ahead of the weekend."
In London, futures prices for North Sea Brent oil rallied on the International Petroleum Exchange, primarily because of continued concerns about Middle East tensions. The October Brent contract was up 58¢ Friday to $28.31/bbl. The October natural gas contract, however, lost 2.7¢ to the equivalent of $2.63/Mcf on IPE.
The average price for OPEC's basket of seven benchmark crudes was up 23¢ to $27.46/bbl on Friday.
For the whole week, however, OPEC's basket price averaged $27.52/bbl, up 98¢ from the previous week. So far this year, that basket price has averaged $23.25/bbl, up from $23.12/bbl for all of 2001.