Market watch: Energy futures plummet with signs of Iraqi agreement

Energy futures prices plummeted on international markets Monday with indications that Iraqi and UN officials may be close to a 6-month renewal of the oil-for-food export program for that country. The July contract for benchmark US sweet, light crudes fell 96¢ to $27.55/bbl on the New York Mercantile Exchange.


By the OGJ Online Staff

HOUSTON, June 19 -- Energy futures prices plummeted on international markets Monday with indications that Iraqi and UN officials may be close to a 6-month renewal of the oil-for-food export program for that country.

Sources said the two sides could reach an agreement before the weekend, ending Iraqi's temporary embargo of most of its oil exports.

But even prior to that report, analysts said, international markets were weakening in anticipation that US gasoline inventories might exceed flagging demand.

The July contract for benchmark US sweet, light crudes plunged 96¢ to $27.55/bbl on the New York Mercantile Exchange, while the August contract dropped 95¢ to $27.67/bbl. Both continued to decline in after-hours electronic trading to $27.50/bbl and $27.63/bbl, respectively.

Home heating oil for July delivery lost 3.35¢ to 77.1¢/gal. Unleaded gasoline for the same month was down 2.14¢ to 85.15¢/gal. The July natural gas contract fell 40¢ to $3.94/Mcf on the NYMEX.

In London, futures prices for North Sea Brent crude plummeted on the International Petroleum Exchange, breaking through supports at $28/bbl, $27.50/bbl, and $27/bbl in rapid succession. Each time the price fell below a support level, it triggered additional stop-loss technical selling and accelerated the rate of decline, brokers reported.

The August Brent contract closed at $27.01/bbl, down $1.11 for the day after trading in a range of $26.97-$28.08/bbl. The July natural gas contract also dropped 11¢ to the equivalent of $2.60/Mcf.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes dropped 78¢ to $25.81/bbl.

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