MARKET WATCH: Oil, gas prices fall in apprehensive markets
Oil and gas prices fell May 31 as the generally anticipated decision by the Organization of Petroleum Exporting Countriesto maintain current production targets appeared nevertheless to weigh on markets (OGJ Online, May 31, 2013).
In the equity market, the Standard & Poor’s 500 Index closed down 1% in the holiday-shortened week—“the first such consecutive weekly decline since November,” said analysts in the Houston office of Raymond James & Associates Inc.
Traders seemed to shrug off some positive indications of a strengthening US economy and focused instead on signs last week of further economic contractions in China, said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. Investor interest in oil markets and most commodities cooled last week amid signs the Federal Reserve Bank will start winding down its bond purchases, he said.
“‘Taper’ is quickly becoming the most-feared word in the dictionary for money-managers, and the market will likely continue to hang on every utterance from the Federal Reserve,” Raymond James analysts said. The front-month crude contract fell 2% in the New York market last week following OPEC’s decision and a Department of Energy report US crude inventories have climbed to their highest level since EIA began collecting data in 1978.
“Meanwhile, traders sent natural gas prices on a 6% plunge (below the $4 handle) on milder weather forecasts and bearish injection data,” Raymond James reported. The SIG Oil Exploration & Production Index and the Oil Service Index both posted 2% losses last week.
Energy prices
The July contract for benchmark US light, sweet crudes fell $1.64 to $91.97/bbl May 31 on the New York Mercantile Exchange. The August contract dropped $1.59 to $92.21/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down $1.64 to $91.97/bbl.
Heating oil for July delivery lost 6.28¢ to $2.78/gal on NYMEX. Reformulated stock for oxygenate blending for the same month declined 3.36¢, also closing at a rounded $2.78/gal.
The July natural gas contract retreated 3.9¢ to $3.98/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., decreased 12.7¢ to $4/MMbtu.
In London, the July IPE contract for North Sea Brent declined $1.80 to $100.39/bbl. Gas oil for June dropped $14 to $844.75/tonne.
The average price for OPEC’s basket of 12 benchmark crudes fell 99¢ to $98.78/bbl. So far this year, OPEC’s basket price has averaged $105.85/bbl.
Contact Sam Fletcher at [email protected].

Sam Fletcher | Senior Writer
I'm third-generation blue-collar oil field worker, born in the great East Texas Field and completed high school in the Permian Basin of West Texas where I spent a couple of summers hustling jugs and loading shot holes on seismic crews. My family was oil field trash back when it was an insult instead of a brag on a bumper sticker. I enlisted in the US Army in 1961-1964 looking for a way out of a life of stoop-labor in the oil patch. I didn't succeed then, but a few years later when they passed a new GI Bill for Vietnam veterans, they backdated it to cover my period of enlistment and finally gave me the means to attend college. I'd wanted a career in journalism since my junior year in high school when I was editor of the school newspaper. I financed my college education with the GI bill, parttime work, and a few scholarships and earned a bachelor's degree and later a master's degree in mass communication at Texas Tech University. I worked some years on Texas daily newspapers and even taught journalism a couple of semesters at a junior college in San Antonio before joining the metropolitan Houston Post in 1973. In 1977 I became the energy reporter for the paper, primarily because I was the only writer who'd ever broke a sweat in sight of an oil rig. I covered the oil patch through its biggest boom in the 1970s, its worst depression in the 1980s, and its subsequent rise from the ashes as the industry reinvented itself yet again. When the Post folded in 1995, I made the switch to oil industry publications. At the start of the new century, I joined the Oil & Gas Journal, long the "Bible" of the oil industry. I've been writing about the oil and gas industry's successes and setbacks for a long time, and I've loved every minute of it.