MARKET WATCHCrude futures prices fall from new record high
Sam Fletcher
Senior Writer
HOUSTON, Aug. 9 -- Crude futures prices slipped below the $44/bbl mark at close of Friday's trading session, after earlier hitting a new high of $44.77/bbl in overnight trading on the New York Mercantile Exchange.
The September contract for benchmark US light, sweet crudes peaked at a record high after an official at OAO Yukos said the beleaguered Russian oil company didn't have the funds to sustain crude exports because the national exchequer was taking all of its earnings to meet a tax demand. However, later reports of a legal victory for Yukos in a Russian court helped roll back prices, analysts said.
Meanwhile, members of the Organization of Petroleum Exporting Countries may again raise its production quota to match the group's actual output when they meet Sept. 15 in Vienna, said Purnomo Yusgiantoro, OPEC's conference president. He said Monday that actual OPEC production is close to 30 million b/d, vs. an official quota of 26 million b/d.
Purnomo said Friday that OPEC might increase its production by another 1.5 million b/d. However, analysts said any increase in OPEC's actual production would virtually wipe out the group's—and specifically Saudi Arabia's—swing capacity. Moreover, they said, the extra production wouldn't reach consuming countries in the northern hemisphere before the period of peak winter demand.
Energy prices
The September crude contract closed at $43.95/bbl, down 46¢ for the day Friday on NYMEX, while the October contract lost 28¢ to $43.52/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., declined by 45¢ to $43.95/bbl.
Heating oil for September delivery fell by 1.84¢ to $1.1746/gal Friday on NYMEX. Gasoline for the same month pulled back by 0.97¢ to $1.2347/gal. The September natural gas contract plunged by 12.4¢ to $5.59/Mcf on NYMEX, "falling sharply for the third time in five sessions, bringing total losses for the week to 52¢[/Mcf], or 8.6%," said analysts Monday at Enerfax Daily. "Prices are now just over 5¢[/Mcf] above their April lows as meterologists' expectations of a hot August have so far failed to materialize," they said.
In London, the September contract for North Sea Brent crude declined by 49¢ to $40.63/bbl Friday on the International Petroleum Exchange. Gas oil for August delivery was down by $3.50 to $378.50/tonne. The September natural gas contract dipped by 0.75¢ to the equivalent of 43.90/Mcf on IPE.
The average price for OPEC's basket of seven benchmark crudes increased by12¢ to $39.67/bbl Friday. So far this year, OPEC's basket price had averaged $33.28/bbl, up from $28.10/bbl for all of 2003.
Contact Sam Fletcher at [email protected]