MARKET WATCH: Oil, gasoline futures prices drop on US market
The front-month oil contract fell July 25 on the New York futures market along with falling gasoline prices.
Senior Staff Writer
HOUSTON, July 28 -- The front-month oil contract fell July 25 on the New York futures market along with falling gasoline prices.
Analysts said prices still have yet to fully reflect falling US oil demand caused by high energy prices. Some analysts suggest the market's momentum points to more oil price declines.
The American Automobile Association reported July 28 that the nationwide average price for a regular gasoline was $3.958/gal. An AAA spokesman forecast retail gasoline prices could drop as much as 25¢/gal by Labor Day.
Meanwhile, oil prices rallied in trading shortly after markets opened July 28. Pritchard Capital analysts attributed the rally in part to news that rebel group Movement for the Emancipation of the Niger Delta (MEND) claimed responsibility for attacks on two southern Nigeria pipeline operated by Royal Dutch Shell PLC.
In other price-related news, US Coast Guard officials July 25 reopened the Mississippi River in New Orleans to restricted shipping traffic. Some 200 ships and barges had backed up while the river was completely closed for 2 days following a fuel oil spill.
Liberian tanker Tintomara, owned by Whitefin Shipping Co. of Gibraltar, and an American Commercial Lines barge collided on July 23, causing the spill (OGJ Online, July 25, 2008).
The 600-ft tanker, loaded with styrene and biodiesel, split the 190-ft barge, dumping an estimated 419,000 gal of fuel oil. Divers inspected the barge, which partially sank and wedged against a bridge. The tanker was not seriously damaged.
Louisiana state authorities said they believe the spill was contained, preventing environmental damage to wetlands.
The September contract for benchmark US light, sweet crudes dropped $2.23 to $123.26/bbl July 25 on the New York Mercantile Exchange. In earlier trading during that day's session, the contract dipped to $122.50/bbl—its lowest price in 7 weeks. The October contract settled at $123.82/bbl, down $2.15/bbl.
On the US spot market, West Texas Intermediate at Cushing, Okla., was down $1.48 to $123.26/bbl. Heating oil for August fell 4.42¢ to $3.5229/gal on NYMEX. RBOB for the same month lost 2.71¢ to $3.03/gal.
The August natural gas contract declined again to close at $9.08/MMbtu, down 23.9¢ for the day on NYMEX. On the US spot market, gas at Henry Hub, La., lost 41.5¢ to $9.32/MMbtu.
In London, the September IPE contract for North Sea Brent crude fell $1.92 to $124.52/bbl. The August gas oil contract, however, fell $7.75 to $1,155.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 13 reference crudes rose 21¢ to $122.63/bbl on July 24.
Contact Paula Dittrick at email@example.com.