Market watch: London oil futures market recoups most of previous loss
Oil futures prices rebounded Friday on the International Petroleum Exchange in London, recouping most of the previous day's loss, while the New York Mercantile Exchange remained closed.
By OGJ editors
HOUSTON, July 8 -- Oil futures prices rebounded Friday on the International Petroleum Exchange in London, recouping most of the previous day's loss, while the New York Mercantile Exchange remained closed for the extended US July 4 holiday.
"It was a relatively uneventful week for oil prices, as gasoline supplies appeared adequate heading into the long Fourth of July weekend, while crude imports reached their highest level so far this year," Robert Morris at Salomon Smith Barney Inc. in New York reported Monday. "Along the natural gas front, concerns regarding more-than-adequate storage levels this summer grew even as a heat wave engulfed much of the country."
The US Energy Information Administration's report last week that 69 bcf of natural gas was injected into US underground storage during the week ended June 28 was in line with analysts' expectations, Morris said. But he also noted that the EIA, which took over weekly gas storage reporting duties from the American Gas Association in May, "reported yet another upward revision to the prior week's estimate, which was a bit disconcerting."
In London, the August contract for North Sea Brent oil gained 18¢ to $25.73/bbl Friday on the IPE. However, the August natural gas contract slipped by 3.1¢ to the equivalent of $2.12/Mcf.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes gained 14¢ to $25/bbl Friday.
For the week as a whole, that basket price averaged $25.07/bbl, up 40¢ from the previous week. So far this year, OPEC's basket price has averaged $22.28/bbl, including an average price of $19.83/bbl during the first quarter and $24.51/bbl during the second quarter. That compares with an average of $23.12/bbl for all of 2001.
Market share war downplayed
Meanwhile, Alvaro Silva Calderon, Venezuela's new energy minister who was recently named secretary general of OPEC, was quoted in a Caracas newspaper as downplaying fears of a possible world oil market share war.
Responding to questions about Russia's announced plans to ramp up its oil exports in the last half of 2002, ending its former cooperation with OPEC, Silva said, "What is being observed is a path towards cooperation with those (non-OPEC) countries."
He said, "Currently, those nations are no longer absent from that (oil market price) planning. Today, they go to OPEC (meetings) and conceptually share the needs to carry out a policy of rationalization of the market. That is a step forward, because there is no longer anyone planning a price war to control the market."