MARKET WATCHEnergy futures prices dip in profit taking
Sam Fletcher
Senior Writer
HOUSTON, Oct. 14 -- Energy futures prices generally dipped Monday as traders cashed in their gains from the strong rally last week.
Trading was thin on the New York Mercantile Exchange because of the Columbus Day holiday in the US. Most government and many business offices were closed, and several market participants took the day off as well.
Iraq's oil exports sabotaged
Meanwhile, Iraq's oil exports and refining capabilities have again been hampered by two explosions on northern pipelines over the weekend, said Iraqi and US officials Tuesday in Baghdad.
The first explosion occurred on the pipeline that connects Kirkuk, Iraq's second largest oil field, with an export terminal in Ceyhan, Turkey. That pipeline was already undergoing repairs to an earlier bomb attack.
A senior official of the US-led Coalition Provisional Authority that now rules Iraq recently reported those earlier repairs were expected to be completed by mid-October and that exports would resume from Ceyhan in November when storage tanks at that Mediterranean port were filled (OGJ Online, Oct. 6, 2003).
That pipeline at its most southern point passes near the town of Baiji, only 30 miles northwest of Tikrit, Saddam Hussein's hometown and a stronghold of his loyalists. All of the previous postwar attacks on the Kirkuk-Ceyhan pipeline occurred in that region (OGJ Online, Sept. 26, 2003).
The second weekend explosion was on a pipeline carrying crude to the Baiji refinery, Iraq's largest.
Officials have said they are seeking other outlets through which to export oil from Iraq's northern fields. Postwar looting and sabotage of oil facilities have kept Iraq's oil exports well below its prewar level of 2 million b/d. Iraq currently is exporting 900,000 b/d of crude from its southern terminal of Mina al-Bakr on the Persian Gulf.
Energy prices
Unleaded gasoline for November delivery fell by 1.36¢ to 87.71¢/gal Monday on NYMEX. Heating oil for the same month lost 0.96¢ to 87.24¢/gal. The November contract for benchmark US sweet, light crudes dipped by 2¢ to $31.95 bbl, but the December position advanced by 7¢ to $32.06/bbl. The spot market price for West Texas Intermediate crude at Cushing, Okla., was unchanged Monday at $31.98/bbl.
The November natural gas contract dropped 10.5¢ to $5.55/Mcf on NYMEX, "pressured by a lagging cash market and some profit taking after last week's strong gains, despite cooler late-week weather forecasts," said analysts Tuesday at Enerfax Daily.
"After a 21% run up in the previous seven sessions, the market was overbought and due for a profit-taking pullback, particularly ahead of this week's [US Energy Information Administration's] inventory report," they said. That report of US natural gas in underground storage during the week ended Oct. 10 is scheduled for release early Thursday.
In London, the November contract for North Sea Brent oil declined by 23¢ to $30.67/bbl Monday on the International Petroleum Exchange. Gas oil for the same month lost $8.75 to $265.50/tonne. However, the November natural gas contract gained 2¢ to the equivalent of $4.20/Mcf.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes lost 13¢ to $29.75/bbl Monday.
Contact Sam Fletcher at [email protected]