Market watch: Energy prices move upward

By the OGJ Online Staff

HOUSTON, June 25 -- Energy futures prices strengthened Friday with growing market confidence that the US will not suffer gasoline shortages this summer and that the Organization of Petroleum Exporting Countries is unlikely to increase production at its scheduled July 3 meeting in Vienna.

After deciding not to increase production at their June conference, OPEC ministers said they would continue monitoring world oil markets and would meet again July 3 to assess whether additional production was needed. However, OPEC Sec. Gen. Alí Rodríguez Araque said Thursday that a production increase still appears unnecessary.

Following the sharp decline in oil prices in recent weeks, most market analysts did not expect a production increase. Rodríguez Araque's statement was reassuring, nonetheless.

The August contract for benchmark US light, sweet crudes gained 27¢ to $26.83/bbl Friday on the New York Mercantile Exchange, while the September contract was up 24¢ to $26.80/bbl.

Unleaded gasoline for July delivery advanced 0.41¢ to 77.5¢/gal. Analysts said it is now apparent that the US can meet its summer demand for gasoline through domestic production and imports.

However, the July contract for home heating oil dipped 0.85¢ to 73.39¢/gal, and natural gas for the same month slipped 0.5¢ to $3.74/Mcf on the NYMEX.

In London, the August contract for North Sea Brent gained 29¢ to $26.59/bbl on the International Petroleum Exchange. Brokers said that market got a boost shortly before closing from wire news reports that US Navy ships were being withdrawn from the Persian Gulf because of a perceived terrorist threat.

Brokers said they expected prices to move higher Monday because that market did not have time to react fully to that news Friday.

Meanwhile, the July natural gas contract fell 9.2¢ to the equivalent of $2.47/Mcf on the IPE.

The average price for OPEC's basket of crudes increased by 25¢ to $25.31/bbl Friday.