Energy futures markets were mixed but generally still upbeat Thursday with an improved outlook on supply and demand fundamentals.

By the OGJ Online Staff

HOUSTON, Mar. -- Energy futures markets were mixed but generally still upbeat Thursday with an improved outlook on supply and demand fundamentals.

Traders were encouraged by a report from analysts at Deutsche Banc Alex. Brown Inc. that members of the Organization of Petroleum Exporting Countries are likely to adhere to production quotas this year, while growth of non-OPEC production capacity will probably slow in 2003.

Improved prospects for higher oil prices will probably avoid a potential price war between Russian oil companies and OPEC members, they said.

The April contract for benchmark US light, sweet crudes gained 45¢ to $21.74/bbl Thursday on the New York Mercantile Exchange. The May position advanced the same amount to $21.96/bbl. Both positions continued to climb in after-hours electronic trading to $21.77/bbl and $21.97/bbl, respectively.

Heating oil for March delivery also increased by 0.89¢ to 56.28¢/gal on NYMEX. But unleaded gasoline for the same month dipped 0.3¢ to 58.1¢/gal.
The April natural gas contract also lost 7¢ to $2.36/Mcf.

In London, futures prices for North Sea Brent oil pushed above $21/bbl, triggering technical buying on the International Petroleum Exchange.

Brokers said that market was encouraged that US refiners also have restrained production. If refiners continue to exercise such restraint, they said, there is a reasonable chance that a price slide for petroleum products could be averted in the second quarter.

The April Brent contract gained 48¢ to $21.33/bbl Thursday. The April natural gas contract inched up 1.2¢ to the equivalent of $2.37/Mcf on the IPE, just barely above the NYMEX closing price.

The average price for OPEC's basket of seven crudes increased by 57¢ to $20.03/bbl Thursday.