Market watch: Short covering spurs products price rebound

Energy futures prices were mixed during trading Thursday on the New York Mercantile Exchange, as short covering by traders triggered a rebound for petroleum products.

May 17, 2002

2 min read

By OGJ editors

HOUSTON, May 17 -- Energy futures prices were mixed during trading Thursday on the New York Mercantile Exchange, as short covering by traders triggered a rebound for petroleum products.

Oil prices retreated but remained overpriced as a result of speculative buying in recent weeks, said market analysts. Additional corrections may yet be in store, they predicted.

The June contract for benchmark US light, sweet crudes dropped 20¢ to $27.95/bbl on NYMEX, while the July contract was down 13¢ to $27.08/bbl. However, both positions rebounded in after-hours electronic trading to $28.13/bbl and $27.27/bbl, respectively.

Unleaded gasoline for June delivery gained 0.71¢ to 79.53¢/gal, while heating oil for the same month was up 0.37¢ to 68.16¢/gal. However, the June natural gas contract dipped 3.1¢ to $3.61/Mcf.

In London, futures prices for North Sea Brent oil were little changed after a day of fairly volatile trading on the International Petroleum Exchange.

The June Brent contract reached a high of $26.61/bbl Thursday as that market corrected and stabilized, following a sharp fall Wednesday. But then values slipped and the contract closed at $26.22/bbl, up 5¢ for the day. The June natural gas contract gained 0.4¢ to the equivalent of $1.70/Mcf on the IPE.

Brokers said the IPE oil market was trying to stabilize and seemed steady at a price level above $26/bbl for the time being. However, they said, more constructive news would be needed to keep prices at that level.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes lost 15¢ to $25.30/bbl Thursday.