MARKET WATCHOil futures prices in New York end week on steadier note

Oil futures prices steadied on the New York market Friday after having declined throughout the week. Natural gas and refined petroleum products prices, meanwhile, continued their slide.

Feb. 2, 2004

3 min read

By OGJ editors
HOUSTON, Feb. 2 -- Oil futures prices steadied on the New York market Friday after having declined throughout the week. Natural gas and refined petroleum products prices, meanwhile, continued their slide.

The Organization of Petroleum Exporting Countries is slated to meet in Algiers Feb. 10. Some OPEC ministers have said that they expect to maintain current production limits.

Merrill Lynch Global Securities analyst Michael Rothman said he expects ministers "to adhere more strictly to current quotas headed into the lower second quarter of 2004 when the demand for their oil is expected to seasonally decline."

Algerian oil minister Chakib Khelil was among the ministers trying last week to calm fears that OPEC might seek a production cut.

"The most comfortable position may be to 'let's wait and see' what happens in the second quarter, and we still have on Mar. 31 to see if we should be doing something there," he told Reuters on Thursday.

Energy prices
The March contract for benchmark US light, sweet crudes rose by 24¢ to $33.05/bbl Friday on NYMEX, while the April position lost 2¢ to $32.10/bbl.

On the US spot market, West Texas Intermediate at Cushing, Okla., climbed 47¢ to $33.15/bbl Friday.

The March natural gas fell 26.2¢ to close at $5.397/Mcf on NYMEX, marking its lowest close since Jan. 13.

Heating oil for February delivery fell 1.3¢ to close at 93.14¢/gal Friday on NYMEX. Gasoline for the same month was down by 1.1¢ to 98.04¢/gal. March became the lead-month contract for petroleum products Monday.

Rothman anticipates that supply pressures on the US gasoline market will persist, creating upward price pressure at the pump.

"There is already evident tightness for reformulated fuel (RFG), which accounts for about 30% of total gasoline use and, importantly, most all the fuel consumed in major population hubs (including the New York tristate area with New York harbor being the delivery point for the New York Mercantile Exchange unleaded contract.) Total US motor fuel inventories currently stand 5% below normal with RFG stocks 33% below normal and just 500,000 bbl from their 10-year low," Rothman said.

In London, the March contract for North Sea Brent oil gained 5¢ to $29.18/bbl on the International Petroleum Exchange. Gas oil for February delivery gained $2.50 to $258.50/tonne.

The March natural gas contract was up by 5¢ to the equivalent of $4.01/Mcf ion the IPE Friday.

OPEC's average basket price for seven types of crude oil stood at $29.49/bbl on Jan. 28—the 39th consecutive day above the cartel's target price band of $22-28/bbl, analysts said.