Market watch, Aug. 30

Energy futures declined Tuesday on the New York Mercantile Exchange as traders locked in profits prior to a new American Petroleum Institute report that US inventories of oil and petroleum products increased last week.


Energy futures declined Tuesday on the New York Mercantile Exchange as traders locked in profits prior to a new American Petroleum Institute report that US inventories of oil and petroleum products increased last week.

New reports that the Organization of Petroleum Exporting Countries might increase production by 500,000 b/d also contributed to the decline.

The API reported US crude stocks increased by 5.26 million bbl to a total 285.96 million bbl last week. Inventories of distillates, including heating oil and diesel, also were up by 1.04 million bbl to 112.22 million bbl total.

The October contract for benchmark US light, sweet crudes dipped 13� to $32.74/bbl on the NYMEX, while the November contract lost 11� to $31.83/bbl. After-hours electronic trading was mixed, with the October contract sliding down to $32.70/bbl and the November position rising to $31.90/bbl.

The September contract for home heating oil dropped 1.29� to 98.59�/gal, while unleaded gasoline for the same month was down 0.45� to 97.32�/gal. The September contract for natural gas lost 6.7� to $4.62/Mcf.

In London, however, a mix of bullish sentiment and technical factors caused a surge of oil futures prices on the International Petroleum Exchange. The October contract for North Sea Brent crude jumped 97� to $31.36/bbl. The September natural gas contract was up 1� to the equivalent of $2.43/Mcf.

The average price for OPEC's basket of seven crudes gained 15� to $31.37/bbl Tuesday.

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