MARKET WATCHEnergy futures prices slip in profit taking

By OGJ editors

HOUSTON, May 7 -- Energy futures prices slipped slightly Thursday in profit taking mostly among technical traders.

Markets also reacted to a statement by US Federal Reserve Chairman Alan Greenspan that China's economic boom is bound to damper down to "more realistic" levels that would weaken demand for crude in Asia. "You cannot continue to expect the rate of increase in the Chinese economy anywhere near where it's been recently. My impression is it will slow down to a more sustainable state from a quite high rate of growth," he said Thursday at an economic conference sponsored by the Chicago Federal Reserve Bank.

However, analysts claimed that continued attacks on US-led coalition forces in Iraq could only drive up crude prices. Political tensions in the Middle East and fears of a US gasoline shortage this summer have resulted in a $6/bbl premium in current prices for crude, said Hossein Kazempour Ardebili, Iran's representative to the Organization of Petroleum Exporting Countries, to Dow Jones Newswires on Thursday.

The June contract for benchmark US light, sweet crudes lost 20¢ to $39.37/bbl Thursday on the New York Mercantile Exchange, while the July contract retreated by 19¢ to $39.17/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by 20¢ to $39.38/bbl.

After registering record high prices in 9 out of 10 NYMEX trading sessions since Apr. 22, gasoline for June delivery dipped by 0.05¢ to $1.312/gal Thursday. However, heating oil for the same month gained 0.67¢ to $1.0045/gal on NYMEX.

The June natural gas contract dropped 9.1¢ to $6.22/Mcf Thursday on NYMEX. "Crude oil didn't rally, so the natural gas market couldn't get above $6.36[/Mcf], which triggered some profit-taking ahead of the weekend," said analysts Friday at Enerfax Daily. "Slightly warmer late-week weather forecasts, particularly for Texas and the South,, and high crude oil prices have helped underpin gas this week, despite a huge storage surplus compared [with] last year."

In London, the June contract for North Sea Brent crude lost 19¢ to $36.53/bbl in profit taking on the International Petroleum Exchange. However, gas oil for May delivery increased by $6.50 to $328.25/tonne. The June natural gas contract inched up by 0.37¢ to the equivalent of $3.71/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes gained 58¢ to $35.88/bbl Thursday.