Market Watch, June 15
Energy prices continued to move up in trading on the New York Mercantile Exchange Wednesday, with gasoline prices closing at a 9-year high on a report of a steep decline in reformulated gasoline inventories.
Energy prices continued to move up in trading on the New York Mercantile Exchange (NYMEX) Wednesday, with gasoline prices closing at a 9-year high on a report of a steep decline in reformulated gasoline inventories. Oil and natural gas prices also rose.
Traders said the picture remains confused on the eve of the Organization of Petroleum Exporting Countries's (OPEC) meeting in Vienna Wednesday. The cartel has avoided a production increase, even though prices last week reached levels that should have triggered a 500,000 b/d hike under a formula adopted in March.
Analysts say Saudia Arabia must persuade other OPEC members the organization can boost production without sending prices down sharply. Some OPEC officials have blamed rising gasoline prices on tax policies adopted by major consuming countries, but representatives of the International Energy Agency strongly dispute the contention.
Unleaded gasoline for July delivery was up 1.83� to $1.0805. The US Department of Energy Wednesday reported reformulated gasoline inventories were down 1.5 million bbl. On Tuesday, the American Petroleum Institute reported a decline of 1.871 million bbl.
Crude oil for July delivery was up 29� to $32.85/bbl. US oil inventories were down 2.1 million bbl, the API reported, while the US Energy Information Agency reported a decline of 1.4 million bbl.
In other trading on the NYMEX, July natural gas rose 9.8� to $4.256/mcf. Heating oil closed at 78.56�/gal, up 0.05�.
On the International Petroleum Exchange (IPE) in London, Brent crude for July delivery fell 47� to close at $31.02/bbl. July gas oil closed at $238.25/tonne, up 25�. On the IPE, July natural gas closed at the equivalent of $2.58, up 0.04�.
In after-hours trading on the NYMEX, July crude futures were trading down 20�, to $32.65/bbl, after Reuters reported private talks aimed at easing oil prices were taking place in the Netherlands between Saudi Arabian Oil Minister Ali al-Naimi and Mexico's Energy Sec. Luis Tellez.
Some OPEC members appear reluctant to boost oil output because they are already producing to capacity and would be unable to take advantage of higher export quotas. Saudi Arabia, Kuwait, and the United Arab Emirates are believed to be the only members capable of increasing OPEC exports. The cartel production is presently about 28.4 million b/d, accounting for one-third of world production of 77 million b/d.