MARKET WATCHOil prices drop modestly in New York

Oil prices settled modestly lower on the New York Mercantile Exchange Mar. 30 but still remained near highs for the year because of traders' concerns about supply as UK Prime Minister Tony Blair said his government would not negotiate for the 15 British sailors and marines seized Mar. 23 by Iran in the Persian Gulf.

By OGJ editors
HOUSTON, Apr. 2 -- Oil prices settled modestly lower on the New York Mercantile Exchange Mar. 30 but still remained near highs for the year because of traders' concerns about supply as UK Prime Minister Tony Blair said his government would not negotiate for the 15 British sailors and marines seized Mar. 23 by Iran in the Persian Gulf.

Oil prices were already high because of seven consecutive weeks of declines in US gasoline inventories as reported by the US Energy Information Administration. Traders are closely watching the UK-Iran political standoff, noting Iran is along the Strait of Hormuz—an oil tanker route for deliveries to the US, Western Europe, and Japan.

On Apr. 2 wire services reported Iran's state radio as saying that all 15 British sailors and marines confessed to entering Iranian waters. The British government said they were in Iraqi water when arrested, operating under a United Nations mandate. UK officials reportedly have given global positioning satellite coordinates to the UN to support its claim.

Energy prices
The May contract for benchmark US light, sweet crudes fell 16¢ to $65.87/bbl Mar. 30 on NYMEX. The June contract climbed 19¢ to $67.47/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down 16¢ to $65.88/bbl. The April contract for reformulated blend stock for oxygenate blending (RBOB) dropped 2.4¢ to $2.1115/gal on NYMEX. Heating oil for the same month gained 0.22¢ to $1.8794/gal.

The May natural gas contract gained 12¢ to $7.73/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., was up 13¢ to $7.48/MMbtu.

In London, the May IPE contract for North Sea Brent crude climbed 22¢ to $68.10/bbl. Gas oil for April rose $16 to $591.75/tonne.

The Organization of Petroleum Exporting Countries basket of 11 benchmark crudes was $63.46/bbl on Mar. 30, up $1.11/bbl from the Mar. 29 OPEC report.

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