Market watch: Energy futures prices mixed on international markets

Energy futures prices increased Tuesday on the New York Mercantile Exchange but retreated in the bearish London market. The July contract for benchmark US light, sweet crudes moved up 14¢ to $29.18/bbl on the NYMEX.


By the OGJ Online Staff

HOUSTON, June 13 -- Energy futures prices increased Tuesday on the New York Mercantile Exchange but retreated in the bearish London market.

The July contract for benchmark US light, sweet crudes moved up 14¢ to $29.18/bbl on the NYMEX, with the August contract adding 20¢ to $29.39/bbl. In after-hours electronic trading, both contracts continued to climb to $29.58/bbl and $29.71/bbl, respectively.

Home heating oil for July delivery gained 1.9¢ to 80.17¢/gal, while unleaded gasoline for the same month increased 1.17¢ to 89.51¢/gal. The July natural gas contract was up 12.2¢ to $4.30/Mcf.

In London, technical selling and apprehension over the pending weekly report of US inventories by the American Petroleum Institute combined to push down North Sea Brent oil prices on the International Petroleum Exchange.

The July Brent contract declined the most, down 11¢ to $29.46/bbl. Positions for most other months were a few cents lower and little changed. The July natural gas contract dropped 5.9¢ to the equivalent of $2.83/Mcf on the IPE.

Brent futures could stabilize around $29.50/bbl, or a bearish reaction to data on US gasoline inventories could trigger a fast fall, analysts said.

After the close of regular trade on the NYMEX, the API reported Tuesday that US crude inventories dropped by 13.2 million bbl to a total 312.2 million bbl last week. But US gasoline stocks increased by 6.3 million bbl to 215.6 million bbl overall. Distillate fuel stocks were up 274,000 bbl to 107.4 million bbl total.

However, there are indications of more supply restrictions this week.

Valero Energy Corp., San Antonio, Tex., said Tuesday that flooding caused by Tropical Storm Allison forced it to reduce crude runs at its Houston refinery by 35,000 b/d from Friday through Monday. The company also reduced the crude throughput at its nearby Texas City facility by 25,000 b/d from Friday through Tuesday.

Valero officials said production levels at the company's Krotz Springs refinery between Baton Rouge and Lafayette, La., also have been reduced as flooding prevented trucks from delivering crude to the terminals. High river levels and lock closures delayed barging from those terminals as well.

Officials at Lyondell Chemical Co. earlier reported that a flash fire in one of the coker units at the Lyondell-Citgo Refining facility in Houston injured three workers and left that plant operating at half of its rated capacity of 272,000 b/d. Shell Oil Co.'s Deer Park refinery also was running at "slightly reduced" rates of 320,000 b/d, down from 340,000 b/d, over the weekend (OGJ Online, June 11, 2000).

UN officials Tuesday reported Iraq's oil exports plummeted to 7.2 million bbl last week from 17.4 million bbl the previous week. Iraq has suspended the bulk of its oil exports after UN officials offered only 1 month's extension of the oil-for-food program. Iraq said it would participate only if the program is extended for the usual 6 months.

Since the start of the program in December 1996, UN officials said, Iraq has exported 2.5 billion bbl of oil, producing revenue estimated at $44.3 billion.

The Organization of Petroleum Exporting Countries' basket of seven crudes fell 35¢ to close at $27.14/bbl Tuesday.

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