Market watch, Jan. 18
Energy futures prices weakened in trading on the New York Mercantile Exchange Wednesday, though analysts said the market already had adjusted for the Organization of Petroleum Exporting Countries' 1.5 million b/d output reduction. The American Petroleum Institute's weekly report contributed to the fall.
Energy futures prices weakened in trading on the New York Mercantile Exchange Wednesday, though analysts said the market already had adjusted for the Organization of Petroleum Exporting Countries' 1.5 million b/d output reduction.
They said some market weakness came from the fact that Iraq is planning to resume exports to full capacity by early February. Iraqi exports have been at a lower level since the country's dispute with the United Nations over the pricing of its crude (OGJ Online, Dec. 7, 2000). The American Petroleum Institute's weekly report also contributed to the fall.
Light, sweet crude for February delivery lost 69� to settle at $29.60/bbl on the NYMEX, while the March contract stood at $27.80, down 70�. In after-hours electronic trading, the February contract was $29.76/bbl, and the March contract was $28, both up from Wednesday's close.
Refined petroleum products also closed lower on the NYMEX, with February home heating oil retreating 2.59� to 81.52�/gal, while unleaded gasoline for the same month retreated by 2.03� to 85.79�.
Natural gas for February delivery declined by $1.19 to $6.91/Mcf.
Meanwhile, the American Petroleum Institute released its weekly inventory report after the end of the trading session, 1 day late because of the holiday on Monday.
API said US crude oil inventories rose 1.98 million bbl during the previous week, while distillates, including home heating oil, declined 3.27 million bbl. Gasoline inventories fell 485,000 bbl.
On the International Petroleum Exchange in London Wednesday, February Brent futures, which expired Wednesday, ended at $24.79/bbl, down 73� from the previous close.
The March futures position settled 48� higher at $25.65/bbl. The day's high was $25.75 and the low $25.42.
Market bulls were encouraged by comments from OPEC officials that the organization could cut another 1 million b/d from production in March if prices gave any signs of slumping at the beginning of the second quarter.
The price of natural gas fell 2� to the equivalent of $4.16/Mcf.
The OPEC basket of seven crudes was $23.66/bbl Wednesday, compared with $24.59 the previous day.