Market watch, Aug. 16

Energy prices declined Tuesday on the New York Mercantile Exchange as early indications of a bearish report on US inventories triggered profit-taking among traders.

The September contract for benchmark US light, sweet crudes closed at $31.67/bbl, down 27� from the previous day, after trading above $32/bbl earlier Tuesday. The October contract was down 12� to $30.96/bbl. Those declines continued in after-hours electronic trading to $31.26/bbl and $30.64/bbl respectively.

The September contract for home heating oil also dipped 0.83� to 86.51�/gal on the NYMEX. Unleaded gasoline for the same month retreated 0.11� to 91.91�/gal.

Natural gas for September delivery also lost 8.4� to $4.23/Mcf.

After the NYMEX closed for the day, the American Petroleum Institute reported an increase of 7.4 million bbl in US crude stocks last week to a total 286.4 million bbl. Distillates, including heating oil, rose 1.88 million bbl to 113.23 million bbl total, after 2 consecutive weeks of significant declines in both categories previously.

However, gasoline stocks continued to decline, down 3.34 million bbl to 202.51 million total.

Meanwhile in London, the September contract for North Sea Brent crude registered a strong rise on the International Petroleum Exchange, closing at $32.18/bbl, up 70� for the day, after hitting a 10-year high of $32.80/bbl earlier in the day.

The September gas contract was up 2� to the equivalent of $2.39/Mcf on the IPE.

On the Singapore exchange, Brent crude for September delivery went up 70� to $32.18/bbl. October Brent added 10� to finish at $29.51.

The average price of the Organization of Petroleum Exporting Countries' basket of seven crudes gained 16� to $28.69/bbl.

At a press conference in Algiers, Venezuelan President Hugo Chavez said Tuesday that the success of the upcoming second summit of OPEC heads of state is "guaranteed."

That meeting is scheduled in Caracas in late September. Chavez is completing a whirlwind tour of OPEC members to discuss pending issues.

He said Tuesday that he and other executives of OPEC member countries have reached consensus on all subjects�especially their need to defend and stabilize oil prices.

Chavez claims the upcoming meeting will signal the dawn of a new OPEC, "restructured and not reduced to the observation of quotas, but defending the economic interests of member states."