MARKET WATCH: Energy prices retreat from previous session's spike
Crude oil prices retreated July 2, giving back some of the spike from the previous session that resulted from initial euphoria over the European Union’s latest attempt to resolve the debt crisis on that continent.
In Houston, analysts with Raymond James & Associates Inc. said, “The global economic slowdown has reached US factories as manufacturing activity shrank for the first time in almost 3 years. Broader markets shrugged off the poor economic data, paring back early losses to end the trading session flat (with the Dow Jones Industrial Average down 0.1%).”
They reported, “Crude oil futures fell 1.4% [in the New York market] on the negative economic data, while natural gas futures traded flat despite forecasts for hotter weather.” The Oil Service Index ended the day flat while the SIG Oil Exploration & Production Index followed crude, trading down 0.7%.
Marc Ground at Standard New York Securities Inc., the Standard Bank Group, noted EU sanctions against imports of Iranian crude went in effect July 1. “Although this should have been largely discounted by markets before then, there have been some developments that have raised uncertainty. It is reported Iran’s parliament is putting together a bill that calls for the closure of the Strait of Hormuz to all oil tankers carrying crude to countries imposing sanctions on Iran. A fifth of the world’s crude oil passes through this strait.”
Energy prices
The August contract for benchmark US sweet, light crudes lost $1.21 to $83.75/bbl July 2 on the New York Mercantile Exchange. The September contract dropped $1.22to $84.15/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down $1.21 to $83.75/bbl.
The new front-month August contract for heating oil fell 3.4¢ to $2.68/gal on NYMEX. Reformulated stock for oxygenate blending for the same month declined 0.79¢ to $2.62/gal.
The August natural gas contract remained unchanged at $2.82/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., gained 1.7¢ to $2.76/MMbtu.
In London, the August IPE contract for North Sea Brent decreased 46¢ to $92.34/bbl. Gas oil for July inched up 50¢ to $849/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes climbed $1.18 to $94.17/bbl.
Contact Sam Fletcher at [email protected].
About the Author

Sam Fletcher
Senior Writer
I'm third-generation blue-collar oil field worker, born in the great East Texas Field and completed high school in the Permian Basin of West Texas where I spent a couple of summers hustling jugs and loading shot holes on seismic crews. My family was oil field trash back when it was an insult instead of a brag on a bumper sticker. I enlisted in the US Army in 1961-1964 looking for a way out of a life of stoop-labor in the oil patch. I didn't succeed then, but a few years later when they passed a new GI Bill for Vietnam veterans, they backdated it to cover my period of enlistment and finally gave me the means to attend college. I'd wanted a career in journalism since my junior year in high school when I was editor of the school newspaper. I financed my college education with the GI bill, parttime work, and a few scholarships and earned a bachelor's degree and later a master's degree in mass communication at Texas Tech University. I worked some years on Texas daily newspapers and even taught journalism a couple of semesters at a junior college in San Antonio before joining the metropolitan Houston Post in 1973. In 1977 I became the energy reporter for the paper, primarily because I was the only writer who'd ever broke a sweat in sight of an oil rig. I covered the oil patch through its biggest boom in the 1970s, its worst depression in the 1980s, and its subsequent rise from the ashes as the industry reinvented itself yet again. When the Post folded in 1995, I made the switch to oil industry publications. At the start of the new century, I joined the Oil & Gas Journal, long the "Bible" of the oil industry. I've been writing about the oil and gas industry's successes and setbacks for a long time, and I've loved every minute of it.