MARKET WATCHEnergy futures prices slip with profit taking

Energy futures prices generally slipped Thursday as traders took profits from the earlier rally on world markets.

March 19, 2004

2 min read

Sam Fletcher
Senior Writer

HOUSTON, Mar. 19 -- Energy futures prices generally slipped Thursday as traders took profits from the earlier rally on world markets.

Edmund Daukoru, petroleum adviser to the president of Nigeria, said Thursday that members of the Organization of Petroleum Exporting Countries "would behave responsibly so that prices do not overheat." That group is scheduled to meet Mar. 31 in Vienna.

However, Purnomo Yusgiantoro, OPEC's president, said Thursday that the cartel would not rescind its February decision to cut its production by 1 million b/d, effective Apr. 1.

For the first time in 6 months, OPEC recently lowered its estimate of how much of its oil will be required during the second quarter of this year. After previously increasing its estimate by 3.5% from October through February, OPEC now expects a rollback of 190,000 b/d in demand to 24.76 million b/d in the coming quarter.

Energy prices
The April contract for benchmark US light, sweet crudes lost 25¢ to $37.93/bbl as traders locked in profits in relatively light trading Thursday on the New York Mercantile Exchange. On the US spot market, West Texas Intermediate at Cushing, Okla., continued its recent trend of duplicating the daily performance of the near-month futures contract, dropping the same amount to the same closing price. The May contract declined by 23¢ to $37.39/bbl.

Heating oil for April delivery slumped by 1.22¢ to 94.63¢/gal on NYMEX. Gasoline for the same month was down by 0.5¢ to $1.1527/gal. The April natural gas contract lost 9.1¢ to $5.63/Mcf, "pressured by a late sell off in crude oil futures, despite a stable [natural gas spot] market, cool Northeast and Midwest weather this week, and a neutral weekly inventory report," said analysts Thursday at Enerfax Daily.

In London, the May contract for North Sea Brent crude dropped 40¢ to $33.13/bbl Thursday on the International Petroleum Exchange. However, brokers said they expect prices to rebound in that market amid continued concerns about summer supplies. Surging US demand for gasoline in particular is expected to keep futures prices for crude and gasoline at record levels with US inventories dangerously low, they said.

Gas oil for April delivery gained $1.50 to $291.75/tonne. The April natural gas contract gained 4.3¢ to the equivalent of $3.76/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes inched up by 8¢ to $33.03/bbl Thursday.

Contact Sam Fletcher at [email protected]