Market Watch: Energy futures weaken on concerns about oil supplies

Energy futures prices weakened in trading on the New York Mercantile Exchange Friday, in part because of oil supply concerns. Speculation about informal talks in Spain among Organization of Petroleum Exporting Countries member states kept circulating throughout the session.

Oct. 8, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Oct. 8 -- Energy futures prices weakened in trading on the New York Mercantile Exchange Friday, in part because of oil supply concerns.

Speculation about informal talks in Spain among Organization of Petroleum Exporting Countries member states kept circulating throughout the session. Traders were reluctant to take positions ahead of the weekend because of uncertainty.

The November contract for light, sweet crude, the US benchmark, fell 24¢ to rest at $22.39/bbl, while the December contract stood at $22.81, down by 16¢. However, in after-hours electronic access trading in New York, the November contract was fetching $22.60/bbl and the December contract $23.

Refined petroleum products also closed lower on the NYMEX, with November home heating oil falling 1.25¢ to rest at 64.02¢/gal, while unleaded gasoline for the same month slipped by 1.42¢ to finish at 61.87¢.

NYMEX natural gas for November delivery lost 18.7¢ to settle at $2.227/Mcf.

Uncertainty about OPEC's future actions kept traders out of the market, leading to losses in the whole energy complex.

Analysts referred to the dilemma faced by OPEC nations who wished to boost oil prices but did not want to be seen as being a factor in pushing industrial economies further into recession.

Meanwhile, in London Friday, North Sea Brent crude oil futures fell in late afternoon trading on the International Petroleum Exchange, following news reports that OPEC and non-OPEC producers were unlikely to meet in Madrid to discuss action to bolster falling oil prices.

News of the likely scrapping of the Madrid meeting did trigger some selling.

On Friday, IPE November Brent settled at $21.63/bbl, down 52¢ from the previous close. The day's high was $22.82 and the low $21.60.

Also on the IPE, the November natural gas contract fell 1.5¢ to close at the equivalent of $3.45/Mcf.

OPEC's basket of seven crudes stood at $20.09/bbl Friday, up 18¢ from the previous day. The average price of the basket last week was $20.26/bbl, down from $20.97/bbl in the last week of September. So far this year, the basket has averaged $24.59/bbl.