Market watch: International energy futures prices continue to fall

Energy futures prices continued their dive in international markets Tuesday. The December contract for benchmark US crudes dropped 10¢ to $19.92/bbl on the New York Mercantile Exchange -- the lowest level since July 1999 when the market was rebounding from even lower levels in 1998.

Nov. 7, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Nov. 7 -- Energy futures prices continued their dive in international markets Tuesday, plumbing the lowest levels since 1999.

The December contract for benchmark US sweet, light crudes dropped 10¢ to $19.92/bbl on the New York Mercantile Exchange. That's the lowest price level for benchmark US crude since July 1999 when the market was rebounding from even lower levels in 1998.

Traders apparently have no faith that the Organization of Petroleum Exporting Countries can regain control of the oil market with a proposed reduction of 1-1.5 million bbl from the group's total production quotas at its Nov. 14 meeting.

As expected, the markets even shrugged off suggestions Tuesday by the energy ministers of the United Arab Emirates and Qatar that OPEC might trigger a price war if non-member oil producing countries fail to cooperate with their cutback of production, analysts said.

The January US crude position also lost 13¢ to $20.11/bbl Tuesday on the NYMEX. Both US oil contracts then continued to fall to $19.73/bbl and $19.95/bbl, respectively, in after-hours electronic trading following another bearish report of increased inventories by the American Petroleum Institute.

After the close of the regular trading session Tuesday, API said US oil stocks jumped 3.7 million bbl to a total 308.3 million bbl last week. Distillate inventories, including home heating oil, were up 1.5 million bbl to 127.4 million bbl during the same period.

However, API reported an unexpected decline of 734,000 bbl of unleaded gasoline.

Home heating oil for December delivery dipped by 0.43¢ to 57.13¢/gal during the NYMEX's normal trading session Tuesday. Unleaded gasoline for the same month inched up 0.13¢ to 53.92¢/gal. The December contract for natural gas lost another 4.2¢ to $2.88/Mcf.

In London, the December contract for North Sea Brent crude closed at $19.07/bbl on the International Petroleum Exchange, down 37¢ for the day after trading as low as $18.89/bbl. Reports of diminished profits among major integrated oil companies added to a general gloom over expectations of weaker demand because of an international economic recession, said brokers.

The one bright spot was a 2.2¢ increase in the December natural gas contract to the equivalent of $3.27/Mcf on the IPE.

OPEC's basket of seven crudes lost another 25¢ to $17.56/bbl Tuesday.