Market watch, Aug. 15

International futures markets Monday restarted the rally that had stalled with profit-taking activities Friday, with oil prices knocking at the $32/bbl level, analysts said.


International futures markets Monday restarted the rally that had stalled with profit-taking activities Friday, with oil prices knocking at the $32/bbl level, analysts said.

On the New York Mercantile Exchange, the September contract for benchmark US light, sweet crudes jumped 92� to $31.94/bbl in anticipation of a third week of declines in domestic oil stocks. The October contract also gained 50� to $31.08/bbl. Both continued to inch up in after-hours electronic trading to $31.97/bbl and $31.10/bbl, respectively.

NYMEX trading was spurred by the rapid development of Tropical Storm Beryl, which threatened to strengthen and hit the South Texas coast as a minimal hurricane. Traders feared that would force the shutdown of some production in the Gulf of Mexico and some coastal refineries.

However, the storm made landfall before dawn today in northern Mexico, about 125 miles south of the Texas border and well below hurricane level. It generated only scattered showers and thunderstorms in South Texas, which is suffering a devastating drought this summer.

The September contract for home heating oil also jumped 1.52� to 87.34�/gal Monday on the NYMEX, while unleaded gasoline for the same month was up 0.83� to 92.02�/gal.

However, the September contract for natural gas dipped 15.7� to $4.32/Mcf.

In London, the September contract for North Sea Brent crude surged 91� to close at $31.48/bbl, near the day's high on the International Petroleum Exchange.

Technical and speculative buying was triggered as traders broke through the $31/bbl barrier on the IPE.

With the American Petroleum Institute expected to report a third week of inventory declines after the NYMEX closes, London analysts predicted that the Brent contract would consolidate above $31/bbl today in another rally that could push through the $32/bbl mark.

The September gas contract gained 7� on the IPE to the equivalent of $2.37/Mcf.

On the Singapore Exchange, Brent crude oil for September moved up by 91� to $31.48/bbl, while the October position gained 42� to end at $29.41.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes gained 59� to $28.53.

At a press conference in Nigeria during his whirlwind tour of OPEC states, Venezuelan President Hugo Chavez continued to urge unity among the cartel to promote oil price equity in the range of $22-28/bbl.

Equity in pricing is necessary because some consumer nations have resorted to blackmail in an effort to force down prices, Chavez said. He complained the United Kingdom and the United States in particular deliberately tarred OPEC member nations as bad countries that ganged up to endanger the world economy.

Meanwhile, the OPEC board of governors is meeting in Vienna this week prior to next month's summit meeting of OPEC heads of state in Caracas.

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