Market watch, Aug. 31

International energy futures continued to escalate Wednesday, as traders reacted to a smaller increase in US inventories last week than they had expected.

Markets were unfazed by reports that Saudi Arabia will work with other members of the Organization of Petroleum Exporting Countries to deal with the oil price spike. Analysts expect prices to rise prior to the meeting of OPEC ministers in Vienna on Sept. 10.

On the New York Mercantile Exchange, the October contract for benchmark US light, sweet crudes climbed 58� to $33.32/bbl, while the November contract rose 59� to $32.42/bbl. Both contracts showed negligible declines in after-hours electronic trading to $33.30/bbl and $32.40/bbl, respectively.

The September contract for unleaded gasoline jumped 2.67� to 99.99�/gal on the NYMEX, and home heating oil for the same month was up 0.66� to 99.25�/gal.

The natural gas contract for October increased 15.8� to $4.80/Mcf

In London, the October contract for North Sea Brent closed at $31.98/bbl�up 62� for the day�after trading as high as $32/bbl on the International Petroleum Exchange. Brokers said that market could move above the $32 level soon.

However, the September natural gas contract was down 5� to the equivalent of $2.38/Mcf on the IPE.

The average price for OPEC's basket of seven crudes gained 33� to $31.70/bbl Wednesday.