MARKET WATCHCrude futures price dips below $70/bbl
Sam Fletcher
Senior Writer
HOUSTON, Sept. 5 -- Energy prices fell Sept. 1 ahead of the 3-day weekend Labor Day holiday, which marked the end of the US driving season.
On that same date, the Alaska Oil and Gas Conservation Commission tentatively scheduled a Sept. 26 hearing to determine when operator BP PLC will resume full production from Prudhoe Bay oil field on Alaska's North Slope.
BP is looking at tapping into other pipelines to circumvent parts of its own transit pipeline system that are badly corroded. Such a move would bypass normal metering units used to calculate royalty payments to the state.
Meanwhile, rising US petroleum inventories are stimulating market fears of a global surplus of crude. "While there is no question that US petroleum inventories have been on the rise, we believe that focusing solely on absolute US oil inventories paints an inaccurate depiction of the global oil situation," said analysts in the Houston office of Raymond James & Associates.
US crude inventories remain below 10-year highs and in the lower half of the 10-year range on a "days of supply" basis, the analysts said. Moreover, most of the recent inventory builds have been in the US market and not in other parts of the world where crude inventories remain at the low end of the 10-year range, they said.
Energy prices
The October contract for benchmark US light, sweet crudes lost $1.07 to $69.19/bbl on the New York Mercantile Exchange. The November contract was down by $1.10 to $70.37/bbl. Gasoline for October delivery dropped 4.87¢ to $1.73/gal on NYMEX. Heating oil for the same month decreased by 4.37¢ to $1.97/gal. The October natural gas contract lost 17.1¢ to $5.88/MMbtu.
In London, the October IPE contract for North Sea Brent crude retreated by $1.10 to $68.96/bbl. September gas oil lost $4.75 to $630/tonne.
The average price of the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes fell by 99¢ to $64.38/bbl on Sept. 4.
Contact Sam Fletcher at [email protected].