Market watch: Oil futures rise as natural gas falls
Prices for crude and other petroleum liquids climbed in international futures markets Thursday, but natural gas prices continued to trickle away. The August contract for benchmark US light, sweet crude rose 78¢ to $27.02/bbl Thursday on the New York Mercantile Exchange.
By the OGJ Online Staff
HOUSTON, July 6 -- Prices for crude and other petroleum liquids climbed in international futures markets Thursday, but natural gas prices continued to trickle away.
Increased US demand for oil and gasoline last week and apparently extending through the July 4 holiday helped boost prices. The American Petroleum Institute reported declines in US inventories of both oil and unleaded gasoline last week, while the American Automobile Association estimated a small increase in Independence Day travel this year, although the holiday occurred in mid-week.
The August contract for benchmark US light, sweet crude rose 78¢ to $27.02/bbl Thursday on the New York Mercantile Exchange, while the September contract gained 58¢ to $26.65/bbl.
Unleaded gasoline for August delivery added 0.71¢ to 72.9¢/gal, and home heating oil increased 0.79¢ to 72.39¢/gal.
However, the August natural gas contract lost 6.5¢ to $3.14/Mcf on the NYMEX.
The American Gas Association reported 105 bcf of natural gas was injected into US underground storage facilities last week, down from 108 bcf the previous week but up significantly from injections of 69 bcf during the same period over the last 2 years.
US gas storage now stands at 1.8 tcf, or 186 bcf more than at the same time a year ago. Barring a sudden change in the US economy or an extended summer heat wave, gas injections over the next few months likely will continue to outpace last year, with "at least 3.1 tcf" likely to be in storage by Nov. 1, compared to 2.75 tcf last year, said analysts at Salomon Smith Barney Inc.
As a result, that brokerage group Thursday reduced its natural gas price projection to $3.15/MMBtu for the last half of 2001 and all of 2002, down from a previous peak $4.50/MMBtu.
In London, the August contract for North Sea Brent crude increased by 5¢ to $25.85/bbl on the International Petroleum Exchange. The August natural gas contract lost 4.1¢ to the equivalent of $2.51/Mcf on the IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes also rose by 5¢ to $24.22/bbl Thursday.