Market watch: Energy futures mixed in international markets

Energy futures prices were mixed in generally bearish international markets Tuesday. In after-hours electronic trading, the April contract for benchmark US crudes regained some of its earlier loss on the New York Mercantile Exchange.
Feb. 28, 2001
3 min read


By the OGJ Online Staff


HOUSTON, Feb. 28
�Energy futures prices were mixed in generally bearish international markets Tuesday.

The April contract for benchmark US sweet, light crudes dropped 29� to $28.13/bbl on the New York Mercantile Exchange, while the May contract was down 12� to $28.13/bbl. However, both contracts rebounded to $28.25/bbl and $28.27/bbl, respectively, in after-hours electronic trading following release of the American Petroleum Institute�s weekly report on US petroleum inventories.

After the close of regular trading on the NYMEX, the API late Tuesday reported US crude stocks increased by 2.2 million bbl last week, following a near-record decline of more than 12 million bbl the previous week because of fog that delayed unloading of tankers along the Gulf Coast. US oil inventories totaled 280.96 million bbl, about 3.1 million bbl less than during the same period a year ago, officials said.

The API also reported gasoline stocks declined by more than 1 million bbl, while distillate inventories were down by 992,000 bbl.

During Tuesday trading on the NYMEX, the March contract for unleaded gasoline increased 0.11� to 84.11�/gal, while home heating oil for the same month was unchanged at 74.7�/gal. Natural gas for April delivery gained 18.2� to $5.279/Mcf.

API also reported that US gasoline prices continued to fall during the week ended Friday, with regular gasoline nationwide averaging $1.431/gal, including taxes. Gasoline prices have fluctuated strongly since January 2000, primarily because of volatile oil prices. But gasoline prices also are affected by government regulations that reduced the flexibility of the refining and distribution system to handle the transition to new fuels or any shocks such as pipeline or refinery outages, officials said.

Meanwhile, oil prices are elevated because the balance of supply and demand remains tight worldwide, API officials reported.

Although the Clinton administration released 30 million bbl of crude from the Strategic Petroleum Reserve during the fourth quarter of 2000, the �net effect on domestic supply was likely very small,� officials said.

�In 2000, the US imported more than 56% of its petroleum needs and remains at the mercy of world oil markets,� API reported.

In London, North Sea Brent crude futures were little changed at the close of trading Tuesday on the International Petroleum Exchange. The April Brent contract was down 9� to $26.02/bbl, while the March natural gas contract gained 2� to the equivalent of $3.71/Mcf.

Brokers said Brent oil futures appeared more stable prior to the API report. But they predicted a future fall in prices to $25.50/bbl was likely. That market remains bearish with expectations that the Organization of Petroleum Exporting Countries will not cut production during their March meeting.

OPEC�s basket of seven crudes lost 43� to $23.99/bbl on Tuesday.

Sign up for Oil & Gas Journal Newsletters