Market watch: Energy prices fall on stocks report, lack of bullish news

By the OGJ Online Staff

HOUSTON, Jan. 31 -- Energy prices again fell in trading on the New York Mercantile Exchange Wednesday on confirmation of an American Petroleum Institute report of high inventories, released after close of trading Tuesday.

The March contract for light, sweet crude fell 50¢ to close at $19.08/bbl, while the April contract fell 47¢ to close at $19.44. In after-hours electronic access trading, prices rose slightly. The March contract was fetching $19.13 and the April contract $19.49.

Refined petroleum products also closed lower, with February home heating oil declining by 1.14¢ to finish at 50.91¢/gal, while unleaded gasoline for the same month lost 1.38¢ to settle at 55.31¢.

The NYMEX March gas contract closed at $2.08/Mcf, up 1.3¢.

Meanwhile, in London Wednesday, North Sea Brent crude oil futures also settled lower on the International Petroleum Exchange, having broken through support at $19/bbl on follow-through selling after Tuesday's weaker close.

Brokers noted that US oil inventories were still perceived to be historically high and although prices were temporarily boosted by reports of strong Organization of Petroleum Exporting Countries compliance with lower oil output quotas, the market had run out of bullish news and data to prop up prices.

A drift lower to test support at $18/bbl was inevitable, unless there was a sudden increase in demand, or a cut in supply, for whatever reason, they said. Fundamentally, the market looked weak.

On Wednesday, IPE March Brent futures settled at $18.79/bbl, down by 45¢ from the previous close. The day's high was $19.05 and the low $18.38.

Also on the IPE, the February natural gas contract fell 13¢ to the equivalent of $2.97/Mcf.

The price of the OPEC basket of seven crudes stood at $18.03/bbl Wednesday, compared with $18.38 the previous day.