Market watch: Futures prices drop with demand uncertainty

Worries about decreased demand apparently pushed down energy futures prices on international markets Tuesday. The March contract for benchmark US light, sweet crude lost 58� to $28.81/bbl in its last day of trading on the New York Mercantile Exchange.
Feb. 21, 2001
2 min read


By the OGJ Online Staff


HOUSTON, Feb. 21
�Worries about decreased demand apparently pushed down energy futures prices on international markets Tuesday.

The March contract for benchmark US light, sweet crude lost 58� to $28.81/bbl in its last day of trading on the New York Mercantile Exchange. Expiration of that contract had a more than normal bearish effect on the energy market, officials said.

The April contract also was down 19� to $28.48/bbl on the NYMEX. But in after-hours electronic trading, it rebounded to $28.82/bbl.

Unleaded gasoline for March delivery lost 1.69� to 84.76�/gal on Tuesday, while home heating oil for the same month declined 1.14� to74.87�/gal.

The March natural gas contract also was down 29� to $5.28/Mcf.

Traders apparently believe the winter heating season has essentially ended, relieving any concerns about low fuel stocks. But analysts say a serious cold spell could still alter the market.

Two Arctic air masses are expected to move into the Lower 48 States within the next 2 weeks, dropping temperatures to normal winter levels. However, there has been no change in longer term forecasts for normal to above normal temperatures in the US.

In London, North Sea Brent crude futures slipped back below the $27/bbl level on the International Petroleum Exchanged, influenced by bearish activity on the NYMEX and the need for price movements to generate profits.

The April Brent contract settled at $26.62/bbl, down 69� for the day, after trading in the range of $26.60-$27.46/bbl. The March natural gas contract lost 5� to the equivalent of $3.74/Mcf on the IPE.

Trading volume has been low this week on the IPE, leaving that market vulnerable to sharp swings on light buying or selling, analysts said. So the Brent contract could soon bounce back above $27/bbl, they said.

The average price for the Organization of Petroleum Exporting Countries� basket of seven crudes dropped 42� to $24.86/bbl on Tuesday.

Sign up for Oil & Gas Journal Newsletters