Market watch, Oct. 16

Traders taking profits after the market's significant rally earlier last week caused energy futures prices to tumble Friday on the New York Mercantile Exchange. They also did not want to hold positions over the weekend.


Traders taking profits after the market's significant rally earlier last week caused energy futures prices to tumble Friday on the New York Mercantile Exchange.

Traders were also nervous about holding positions over the weekend in a volatile situation because of tensions in the Middle East. Signs of a reduction in those tensions also played their part in the market's correction as traders became more confident that oil export disruptions from the region were a very remote possibility.

Benchmark NYMEX light, sweet crude declined $1.07 to settle at $34.99/bbl for November delivery, while the December contract stood at $34.13, down $1.59.

Refined petroleum products also closed lower, with November home heating oil losing 6.12� to settle at $1.0161/gal, while unleaded gasoline for the same month pulled back by 3.19� to finish at 96.63�.

NYMEX natural gas for November delivery lost 9.3� to end at $5.54/Mcf.

In after-hours electronic access trading in New York today, light, sweet crude was fetching $33.75/bbl for the November position and $33.20 for the December contract, both down from the NYMEX close.

Meanwhile, in London Friday, North Sea Brent crude oil futures also tumbled on the International Petroleum Exchange as traders actively sold their long positions. Traders said anxiety about the threat of further production increases in the near future created a feeling in the market that prices in excess of $35/bbl were extremely overdone and unjustified.

On Friday, IPE November Brent futures settled at $32.52/bbl, down by $2.07 from Thursday's close. The day's high was $35.07 and the low $32.50.

Any further bearish news was expected to trigger another substantial bout of selling and a fall to $28-30/bbl, the brokers added.

On the IPE, the November natural gas contract closed at the equivalent of $3.95/Mcf, down 3�.

The price of the OPEC basket of seven crudes stood at $32.34/bbl Friday, compared with $32.57 the previous day. The price of the basket through Oct. 12 of this year has averaged $27.34/bbl. In September, the basket price averaged $31.48/bbl, as opposed to $28.30 in August and $27.94 in July.

For the third quarter of 2000, the basket price averaged $29.17/bbl, as against $26.38 in the second quarter. For 1999 as a whole, the price of the basket averaged $17.47/bbl, compared with $12.28 the previous year.

More in Economics & Markets