MARKET WATCHCrude futures prices fall despite attacks on Iraqi pipelines
By OGJ editors
HOUSTON, June 16 -- Futures prices for crude and petroleum products fell in profit taking Tuesday, as traders shrugged off terrorist attacks on Iraqi pipelines that forced the closure of Basra oil terminal.
Attacks on two oil pipelines in southern Iraq on Monday and late Tuesday temporarily have taken some 1.5 million b/d of Iraqi crude off world markets, officials said. Repairs to the larger of the two pipelines could take weeks, they reported. Iraq's state oil-marketing agency closed the Basra terminal following those attacks.
Energy prices also were undermined Tuesday by expectations of reports Wednesday showing substantial increases in US inventories of both crude and gasoline, analysts said.
The US Energy Information Administration reported early Wednesday that, during the week ended June 11, US commercial crude inventories increased by 800,000 bbl to 302.9 million bbl— the highest level since the week ended Aug. 23, 2002. However, crude stocks were still 9 million bbl below the 5-year average for that period.
Meanwhile, US gasoline stocks fell by 500,000 bbl to 205.9 million bbl in the latest week, 8.3 million bbl below the 5-year average. Distillate stocks increased by 1.5 million bbl to 109.8 million bbl, with heating oil accounting for most of that gain.
Energy prices
The July contract for benchmark US light, sweet crudes lost 40¢ to $37.19/bbl Tuesday on the New York Mercantile Exchange. The August contract fell by 46¢ to $37.42/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by 40¢ to $37.18/bbl.
Heating oil for July deliver declined by 0.49¢ to 97.75¢/gal Tuesday on NYMEX. Gasoline for the same month dipped by 0.22¢ to $1.1503/gal. However, the July natural gas contract gained 6¢ to $6.30/Mcf on NYMEX, "fueled by stronger cash prices [on the natural gas spot market] amid hot, humid weather in the Northeast and Midwest that increased demand," said analysts Wednesday at Enerfax Daily.
"Despite this week's gains [in natural gas futures prices]," the analysts said, "the downside seems more likely now, with temperatures in key demand areas expected to cool off a little."
In London, the July contract for North Sea Brent crude lost 20¢ to $35.29/bbl Tuesday on the International Petroleum Exchange. Gas oil for July delivery dropped by $5 to $308.25/tonne. However, the July natural gas contract inched up by 2.1¢ to the equivalent of $3.84/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes lost 57¢ to $33.72/bbl Tuesday.