Market watch: Energy futures prices slip on US softening its stand on Iraq
Energy futures prices generally slipped slightly Friday as the US softened its stand on a United Nations Security Council resolution aimed at curbing Iraq's accumulation of mass-destructive weapons.
By OGJ editors
HOUSTON, Oct. 21 -- Energy futures prices generally slipped slightly Friday as the US softened its stand on a United Nations Security Council resolution aimed at curbing Iraq's accumulation of mass-destructive weapons.
US officials said they might now accept a two-stage process under which the Security Council could authorize military action against Iraq only if it first establishes that the country had broken its agreement not to acquire such weapons.
Only unleaded gasoline defied a downward trend in petroleum product futures prices Friday on the New York Mercantile Exchange, as its November contract jumped 1.19¢ to 85.17¢ gal. US gasoline inventories have declined steadily during the last few weeks, and production by US refiners has remained low, analysts explained.
Meanwhile, the November contract for benchmark US light, sweet crudes dipped 2¢ to $29.60/bbl Friday, while the December contract slipped 4¢, also to $29.60/bbl, on NYMEX. Heating oil for November delivery lost 0.42¢ to 80.35¢/gal.
The November natural gas contract dropped 6¢ to $4.24/Mcf "as a major marketer sold off long positions ahead of a low-demand weekend," said analysts at Enerfax Daily. "The market opened lower and spent the morning slowly building back up, before dipping sharply just after noon to a daily low of $4.17(/Mcf), and then again slowly recovering for the rest of the session. The weather remains this market's driving force, and colder temperatures are seen early this week (as) likely to send prices back up. But if they turn moderate, the price will come down again."
In London, futures prices for North Sea Brent oil declined Friday during a day of fairly volatile trading on the International Petroleum Exchange. The December Brent contract settled at $27.84/bbl, down 13¢ for the day, after trading in the range of $27.65-27.95/bbl. The November natural gas contract plunged 18.1¢ to the equivalent of $3.55/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes lost 4¢ to $28/bbl. Friday.
For last week as a whole, however, OPEC's basket price increased to $28.07/bbl from $27.98/bbl the previous week. So far this year, OPEC's basket price has averaged $23.81/bbl, up from $27.98/bbl the previous week. That compares with average prices of $23.12/bbl for all of 2001 and $27.60/bbl in 2000.
Meanwhile, Libya's acting oil minister said there could be room for OPEC to increase its production quotas at its December meeting, if world demand for oil continues to grow.