Market watch: US oil futures prices fall with profit taking

Futures prices for oil and petroleum products fell Tuesday on the New York Mercantile Exchange as traders took profits from last week's price run-up in anticipation of another bearish report on US inventories by the American Petroleum Institute.

Feb. 20, 2002

2 min read

By the OGJ Online Staff

HOUSTON, Feb. 20 -- Futures prices for oil and petroleum products fell Tuesday on the New York Mercantile Exchange as traders took profits from last week's price run-up in anticipation of another bearish report on US inventories by the American Petroleum Institute.

Because of Monday's holiday, API officials are delaying that report until after the close of NYMEX trading Wednesday. Meanwhile, markets also were impacted by continued mild winter weather in most of the US and signs that Russia's cooperative effort with the Organization of Petroleum Exporting Countries to reduce world oil supplies may be unraveling.

OPEC members want Russia to reduce its oil exports through June to avert further price declines. But privately owned Russian companies are indicating plans to increase production at the end of March.

March and April contracts for benchmark US sweet, light crudes dropped 62¢ each to $20.88/bbl and $21.12/bbl, respectively, Tuesday on the NYMEX. Both positions continued to decline in after-hours electronic trading to $20.71/bbl for March and $20.95/bbl for April.

Unleaded gasoline for March delivery fell 1.84¢ to 59.25¢/gal. Home heating oil for the same month was down 1.49¢ to 54.4¢/gal. However, the March natural gas contract jumped 19.1¢ to $2.40/Mcf on the NYMEX.

The American Gas Association is expected to report a withdrawal of 120 bcf-130 bcf of natural gas from underground storage for the week ended Friday, said Robert Morris of Salomon Smith Barney Inc. That would put year-over-year surplus gas storage at roughly 970 bcf with only 6 weeks left in the usual winter withdrawal season.

In London, futures prices for North Sea Brent crude rose in trading on the International Petroleum Exchange as that market corrected from Monday's lows. The April Brent position closed at $20.52/bbl, up 19¢ for the day after trading in a narrow range of $20.31-$20.70/bbl. The March natural gas contract slipped 4.7¢ to the equivalent of $2.49/Mcf on the IPE, narrowing its lead over the comparable NYMEX gas position to just 9¢.

The price for OPEC's basket of seven benchmark crudes dropped 25¢ to $18.81/bbl Tuesday.