MARKET WATCHNYMEX oil futures down Friday, natural gas rebounds

Crude oil futures prices fell in New York and London markets Friday after the Paris-based International Energy Agency revised upward its earlier reported commercial petroleum stock levels.

June 16, 2003

2 min read

By OGJ editors
HOUSTON, June16 -- Crude oil futures prices fell in New York and London markets Friday after the Paris-based International Energy Agency revised upward its earlier reported commercial petroleum stock levels.

In a monthly report, IEA said the Organization for Economic Cooperation and Development in March held 2.418 billion bbl, an unprecedented increase of 79 million bbl. The figure included 50 million bbl of crude oil.

OECD petroleum stocks still remained lower than usual, IEA said, but the change in statistics prompted discussion among traders that the world market might have surplus oil available because of production from the Organization of Petroleum Exporting Countries.

Analysts said OPEC's higher levels of production had positively affected the international crude oil inventory situation. OPEC ministers are slated to meet July 31.

Also placing pressure on oil markets, Petroecuador declared Saturday a force majeure on its oil exports due to a strike by state oil workers, according to a CNN report. If the strike continues next week, the report said, all shipments will have to be pushed back.

The strike, CNN reported, has caused the nation's 400,000 b/d SOTE oil pipeline to reduce its capacity by 30-40%.

Gas market
On the New York Mercantile Exchange, natural gas futures rebounded Friday, up 6.9¢ to $5.68/Mcf.

Enerfax Daily analysts said fairly mild weather forecasts could mean reduced demand, possibly setting the stage for lower prices this week. No extreme heat was expected across the US for the next few days.

Oil prices retreat
The July contract for benchmark US light, sweet crudes fell by 86¢ to the $30.65/bbl Friday on NYMEX, while the August contract dropped 97¢ to $29.33/bbl. It was the second consecutive NYMEX trading session in which crude oil futures settled lower.

Unleaded gasoline for July delivery dipped by 3.18¢ to 85.87¢/gal on NYMEX. Heating oil for the same month lost 2.20¢ to 74.22¢/gal.

In London, the July contract for North Sea Brent oil was down 37¢ to $27.46/bbl on the International Petroleum Exchange. The July gas contract slipped by 1¢ to the equivalent of $2.88/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes retreated 78¢ Friday to $26.70/bbl.