Market watch: Bush's push for Middle East peace dampens energy prices

Energy futures prices fell sharply Thursday as strong talk from President George W. Bush fanned hopes of at least a ceasefire in the Middle East. Price declines during the past 2 days wiped out most of the earlier increases this week, bringing energy futures back near their pre-Easter levels.

April 5, 2002

2 min read

By OGJ editors

HOUSTON, Apr. 5 -- Energy futures prices fell sharply Thursday as strong talk from President George W. Bush fanned hopes of at least a ceasefire in the Middle East.

Traders were encouraged by Bush's demand that Israel withdraw its forces from Palestinian territories and by his decision to send US Sec. of State Colin Powell to the region.

The first bearish reports of US petroleum inventories from both the American Petroleum Institute and the US Department of Energy in several weeks also accelerated downward momentum from Wednesday's trading session, analysts said. Price declines during the 2 days wiped out most of the increases earlier this week, bringing energy futures back near their pre-Easter levels.

The May contract for benchmark US light, sweet crudes plummeted 98¢ Thursday to $26.58/bbl on the New York Mercantile Exchange, while the June contract fell 85¢ to $26.81/bbl. The May position remained unchanged in after-hours electronic trading, but the June contract continued its slide to $26.77/bbl.

Unleaded gasoline for May delivery fell 2.51¢ to 82.33¢/gal, down 0.16¢ from its closing price a week ago—the only major near-month energy commodity on the NYMEX to suffer a net loss in that period. Heating oil for the same month retreated 2.17¢ to 68.66¢/gal. The May natural gas contract dropped 17.3¢ to $3.33/Mcf.

In London, the May contract for North Sea Brent oil closed at $27.31/bbl, up 4¢ for the day, after trading in a range of $26.80-28.15/bbl on the International Petroleum Exchange. The May natural gas contract declined by 4.8¢ to the equivalent of $1.75/Mcf on the IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes lost 50¢ to $25.22/bbl Thursday.