MARKET WATCHMarkets take holiday break after last week's rally

Energy futures markets in both New York and London were closed Monday for the Memorial Day holiday, but the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes inched up 2¢ to $26.87/bbl.

May 27, 2003

2 min read

By OGJ editors

HOUSTON, May 27 -- Energy futures markets in both New York and London were closed Monday for the Memorial Day holiday, but the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes inched up 2¢ to $26.87/bbl.

Futures prices for crude oil and petroleum products remained strong last week, although prices slumped some late in the week on a vote by the United Nations to end the long ban on international trade with Iraq.

Futures prices for natural gas got a boost last week when Federal Reserve Chairman Alan Greenspan noted the "very serious problem" of tight supplies of North American gas. But prices sagged a little after the US Energy Information Administration reported the largest injection of gas into US underground storage this season, with 90 bcf of gas injected during the week ended May 16.

Nevertheless, analysts said, shares of publicly traded exploration and production companies generally outperformed broader markets last week, posting gains for the fourth consecutive week.

Although the UN vote to lift trade sanctions against Iraq was generally viewed as a bearish signal for the export of more Iraqi oil, some analysts said initial shipments likely would be limited to pre-war production now in storage, with Iraq being slow to ramp up production in coming months (OGJ Online, May 23, 2003).

Meanwhile, Alí Rodríguez Araque, president of Petroleos de Venezuela SA, said Monday that Venezuela's oil production has fully recovered and is now averaging 3.3 million b/d. "We are meeting all our obligations with our clients, and that is reflected in the recent statement by the US Department of Energy, in the sense that Venezuela has recovered its condition of a reliable suppler," he said.

PDVSA is exporting reformulated gasoline to the US, he said. Rodríguez also said that the new PDVSA sill not return to its pre-strike status prior to December 2002. In the new company, he said, "There will be greater participation by the people and what has emerged for the correct management of the company is to channel the different opinions to achieve a common objective, which is the goal of the country."