Market watch: Energy futures prices fall in profit-taking
By the OGJ Online Staff
HOUSTON, Feb. 26 -- Energy futures prices fell Monday in profit-taking by traders amid concerns about supply and demand fundamentals if Russia refuses to curb its oil exports in the second quarter.
Prices had rallied last week on bullish reports of US petroleum inventories by the American Petroleum Institute and the US Department of Energy. However, Alí Rodríguez Araque, secretary-general of the Organization of Petroleum Exporting Countries, said Monday he expects world demand for oil to decline during the second quarter.
The April contract for benchmark US sweet, light crudes dropped 59¢ to $20.48/bbl on the New York Mercantile Exchange, while the May contract was down 51¢ to $20.69/bbl. However, both positions increased in after-hours electronic trading to$20.58/bbl and $20.75/bbl, respectively.
Unleaded gasoline for March delivery fell 2.45¢ to 56.23¢/gal Monday on NYMEX. Heating oil for the same month declined 2.1¢ to 52.51¢/gal. The March natural gas contract retreated by 14.2¢ to $2.31/Mcf, wiping out much of its previous gains.
Robert Morris at Salomon Smith Barney Inc. predicted that the American Gas Association later will report withdrawals of 76-86 bcf of gas from US underground storage facilities through last Friday, down from 112 bcf the previous week and 101 bcf a year ago. That would expand the year-over-year gas storage surplus to more than 1 tcf with only 5 weeks remaining in the typical withdrawal season, he said.
A large arctic air mass is expected to drop most US temperatures below normal levels through the beginning of March. But temperatures should be back to normal early next week.
In London, the April contract for North Sea Brent oil broke through its psychological support watershed at the $20/bbl level, losing 39¢ to close at $19.98/bbl on the International Petroleum Exchange. The March natural gas contract gained 2.2¢ to the equivalent of $2.35/Mcf on IPE, again surpassing the price for the comparable near-month NYMEX gas contract, as it has for most of the last 6 months.
The average price for OPEC's basket of seven crudes lost 19¢ to $18.66/bbl Monday.