MARKET WATCHCrude prices rebound slightly

On Apr. 2, crude contracts regained some of the previous session's losses, but petroleum products futures declined in the New York market in anticipation that a smaller draw on US gasoline inventories will be reported this week as refineries increase operating capacity.

Sam Fletcher
Senior Writer

HOUSTON, Apr. 3 -- On Apr. 2, crude contracts regained some of the previous session's losses, but petroleum products futures declined in the New York market in anticipation that a smaller draw on US gasoline inventories will be reported this week as refineries increase operating capacity.

Although the peak summer driving season has not yet started, US gasoline stocks have fallen in the last seven consecutive weekly government reports because of continued strong demand.

The confrontation between the UK and Iran seemed to soften when Ali Larijani, head of Iran's National Security Council, said Apr. 2 there may be no trial for the 15 UK sailors and marines that Iran seized Mar. 23 in the Persian Gulf. Larijani hinted that the dispute may be resolved diplomatically, perhaps through the involvement of an international delegation.

"While Iran will remain an underlying support as long as the nuclear standoff [between Iran and the United Nation's Security Council] continues, we would expect to loose some of the prompt premium linked to the sailors' issue," said Olivier Jakob, managing director of Petromatrix GMBH, Zug, Switzerland.

However, US officials subsequently asked Iran for information on a former Federal Bureau of Investigation agent who apparently disappeared on a private business trip to that country. Another confrontation involving Iran could push up energy prices once more.

Energy prices
The May contract for benchmark US sweet, light crudes traded as high as $66.69/bbl on Apr. 2 before closing at $65.94/bbl, up 7¢ for the day on the New York Mercantile Exchange. The June contract gained 8¢ to $67.55/bbl.

On the US spot market, West Texas Intermediate at Cushing, Okla., was up 7¢ to $65.95/bbl. However, the new front-month May contract for heating oil lost 1.44¢ to $1.86/gal on NYMEX. The May contract for reformulated blend stock for oxygenate blending (RBOB) dropped 1.52¢ to $2.04/gal.

The May natural gas contract fell by 5.9¢ to $7.67/MMbtu on NYMEX. But on the US spot market, natural gas at Henry Hub, La., escalated by 13.5¢ to $7.62/MMbtu.

In London, the May IPE contract for North Sea Brent crude jumped up 64¢ to $68.74/bbl. However, the April gas oil contract dropped $4.75 to $587/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes gained 26¢ to $63.87/bbl on Apr. 2.

Contact Sam Fletcher at samf@ogjonline.com.

More in General Interest