Market watch: Energy prices fall on NYMEX, IPE

Energy futures prices slumped in trading on the New York Mercantile Exchange Friday. The extent of the decline, especially in product prices, surprised analysts, who mostly attributed the retreat to technical trading. Fundamental factors affecting the market included concerns regarding the consequences of the reentry of Iraqi exports to the market.

By the OGJ Online Staff

HOUSTON, Aug. 20 -- Energy futures prices slumped in trading on the New York Mercantile Exchange Friday.

The September contract for light, sweet crude, the American benchmark, fell 72¢ to settle at $26.68/bbl, while the October contract stood at $25.61, down by 88¢.

In after-hours electronic access trading, the September contract was fetching $26.60/bbl, and the October position $25.56.

Refined petroleum products also ended lower on Friday, with September home heating oil losing 3.64¢ to rest at 70.51¢/gal, while unleaded gasoline for the same month pulled back by 3.50¢ to settle at 73.95¢/gal.

NYMEX natural gas for September delivery declined by 6.4¢ to finish at $3.30/Mcf on Friday.

The extent of the decline, especially in product prices, surprised analysts, who mostly attributed the retreat to technical trading.

Fundamental factors affecting the market included concerns regarding the consequences of the reentry of Iraqi exports to the market.

Meanwhile, in London Friday, North Sea Brent crude oil futures fell heavily after the expiration of the September contract on the International Petroleum Exchange, on increased bearish sentiment.

Brokers said there was a lack of supportive news or data. Prices drifted through key levels of technical support, triggering heavier selling.

They noted that Organization of Petroleum Exporting Countries members were preparing to make production cuts pledged in July as of Sept. 1. They said the market could be encouraged, if monitoring of exports signified the new output ceiling was being strictly adhered to.

The brokers said constructive US oil stock figures, or some unexpected bullish news, was necessary to bolster sagging prices.

On Friday, IPE October Brent, the new front-month contract, settled at $24.73/bbl, down by 90¢ from the previous close. The day's high was $25.85 and the low was $24.65.

Also on the IPE, the September contract for natural gas settled at $2.41/Mcf, up 1.9¢.

OPEC's basket of seven crudes stood at $23.75/bbl Friday, compared with $24.32 the previous day.

The basket price improved to $24.83/bbl last week, compared with $24.61 in the first week of August. The price of the basket so far this year to Aug. 16 has averaged $24.79. For the second quarter, the basket averaged $25.63/bbl, up from $24.36 in the first quarter.

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