Market watch: Monday's Energy futures prices close mixed
Energy futures prices were mixed Monday, with no clear new indicators to which markets could react.
By OGJ editors
HOUSTON, Oct. 8 -- Energy futures prices were mixed Monday, with no clear new indicators to which markets could react.
"We expect the continuing dominance of the US-United Nations-Iraqi debate will keep oil prices firm in the near term," said Matthew Warburton at UBS Warburg LLC, New York, in a weekly traders report issued Monday. "Even though the UN and Iraq agreed on terms for the readmission of weapons inspectors, crude prices remained firm last week due to the ongoing US insistence on the passing of a revised UN resolution prior to the inspectors' dispatch to Iraq," he said.
Meanwhile, Warburton noted that non-commercial oil traders last week "increased their delta adjusted futures and options net long position by 14,316 contracts to 69,043, primarily by cutting their number of short positions. This represents the highest net long position since the CFTC (Commodities Futures Trading Commission) started reporting the combined weekly position last December." In contrast, he said, commercial traders added significantly to their net short position.
The November contract for benchmark US sweet, light crudes gained 2¢ to $29.64/bbl Monday on the New York Mercantile Exchange, while the December position increased by 12¢ to the same price of $29.64/bbl. Unleaded gasoline for November delivery rose 0.75¢ to 80.47¢/gal. Heating oil for the same month dipped by 0.03¢ to 79.16¢/gal.
The November natural gas position inched up 0.1¢ to $3.74/Mcf on NYMEX. "The market, battered by locals short-covering amid trade scale-down selling, finished nearly flat," analysts at Enerfax Daily reported Tuesday. "The market slipped early, recovered by noon, dropped again, and recovered late, ending a long trip to nowhere. Traders waited to see what sort of damage reports came from Gulf of Mexico platforms after Hurricane Lili ripped through the Louisiana coast last week. There seems to be some damage that is going to keep some production offline for a while, but nothing major yet. Look for the market to move higher if more damage reports come in."
Meanwhile, a survey of 30 of the largest US gas producers indicates that US gas production declined by 1% sequentially in the third quarter and likely will be down 6% for the year as a whole, analysts at Raymond James & Associates Inc., St. Petersburg, Fla., reported Monday. It marked the fifth consecutive quarter that US gas production has declined, they said.
"Furthermore," they said, "although the rig count bottomed in March, drilling activity has not increased significantly and is far short of the levels needed to overcome natural declines. Consequentially, we are likely to continue seeing sequential declines in production for the foreseeable future."
In London, the November contract for North Sea Brent oil was up 11¢ to $28.23/bbl Monday on the International Petroleum Exchange. The November natural gas contract lost 0.6¢ to the equivalent of $3.17/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes increased by 1¢ to $28.23/bbl.