Market watch, Oct. 25

Talk of production increases by the conference president of the Organization of Petroleum Exporting Countries gave international energy futures markets a mild case of the jitters Tuesday.


Talk of production increases by the conference president of the Organization of Petroleum Exporting Countries gave international energy futures markets a mild case of the jitters Tuesday.

Continued high prices over the next 4 days could trigger OPEC's price band mechanism, causing the cartel to boost production by another 500,000 b/d, said Ali Rodriguez Araque, who is also Venezuela's energy minister.

However, some analysts say such a move is unlikely prior to OPEC's scheduled meeting Nov. 12 in Vienna.

Nevertheless, the December contract for benchmark US light, sweet crudes dipped 39� to $33.37/bbl on the New York Mercantile Exchange, and the January contract was down 49� to $32.50/bbl.

Both contracts strengthened to $33.52/bbl and $32.63/bbl, respectively, in after-hours electronic trading, when the American Petroleum Institute reported a decline in US inventories of distillates last week.

The November contract for home heating oil closed at 99.44�/gal on the NYMEX, down 0.46� for the day, before the API report was released. Natural gas for the same month tumbled 25.2� to $4.82/Mcf. But unleaded gasoline for November advanced 1.77� to 98.98�/gal.

In London, North Sea Brent dropped 50� to $31.59/bbl on the International Petroleum Exchange. But the November contract for natural gas inched up 2� to the equivalent of $3.58/Mcf.

The average price for OPEC's basket of seven crudes was up 30� to $31.47/bbl Tuesday.

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