By OGJ editors
HOUSTON, June 28 -- Futures prices for oil and petroleum products continued to rally Thursday after Mexico said it would keep its production at 1.66 million b/d during the next quarter in support of efforts by the Organization of Petroleum Exporting Countries to put a floor under crude prices.
In a move that was widely anticipated in world markets, OPEC members voted Wednesday to maintain their current production quotas through September.
Mexico was among the three largest of five non-OPEC producers that agreed in December to cooperate with OPEC in reducing oil output in the first 6 months of 2002. It pledged at that time to reduce crude shipments by 100,000 b/d. Norway also agreed to limit output by 150,000 b/d for the 6-month period, while Russia said it would reduce its exports through the Transneft pipeline by 150,000 b/d.
Both Norway and Russia have since said they will end their production cuts as of July.
The August contract for benchmark US light, sweet crudes gained 10¢ to $28.86/bbl Thursday on the New York Mercantile Exchange, while the September position advanced 23¢ to $26.59/bbl. The August position later dropped back to $26.83/bbl while September inched up to $26.60/bbl in after-hours electronic trading.
Unleaded gasoline for July delivery bumped up 0.86¢ to 79.7¢/gal on NYMEX. Heating oil for the same month added 0.66¢ to 67.29¢/gal. However, the August natural gas contract dropped 11.7¢ to $3.24/Mcf.
In London, the August contract for North Sea Brent oil added 21¢ to $25.45/bbl on the International Petroleum Exchange. But brokers said that market remained vulnerable to selling with any fresh bearish news. The drop in US oil inventories reported earlier this week probably did more to boost that market than OPEC's extension of its production cuts, they said.
The July natural gas contract gained 3.1¢ to the equivalent of $1.93/Mcf on the IPE.
The average price for OPEC's basket of benchmark crudes increased by 7¢ to $24.71/bbl Thursday.