Market watch: Low demand drives down energy prices
Industry and government reports of a larger-than-expected build-up of US petroleum inventories continued to drive down world energy futures prices Thursday. The January contract for benchmark US sweet, light crudes fell 95¢ to $18.54/bbl on the New York Mercantile Exchange.
By the OGJ Online Staff
HOUSTON, Dec. 7 -- Industry and government reports of a larger-than-expected build-up of US petroleum inventories continued to drive down world energy futures prices Thursday.
Meanwhile, Chakib Khelil, conference president of the Organization of Petroleum Exporting Countries, said he is "satisfied" with Russia's decision to reduce its oil exports by 150,000 b/d. Khelil, who also is Algeria's energy minister, said a 500,000 b/d output reduction by non-OPEC members coupled with a 1.5 million b/d rollback of OPEC production quotas could progressively stabilize world oil markets, starting in the first quarter of 2002.
However, since Russia is talking of reducing only its oil exports and not production starting in January, some analysts suspect that oil will go into storage, boosting global stocks.
Russia normally reduces its winter oil exports to produce more refined products for its domestic market.
The January contract for benchmark US sweet, light crudes fell 95¢ to $18.54/bbl Thursday on the New York Mercantile Exchange. The February oil contract also lost 91¢ to $18.93/bbl. However, both contracts recovered some of that loss in after-hours electronic trading, fetching $18.65/bbl and $19.05/bbl respectively.
Home heating oil for January delivery plunged 2.48¢ to 50.66¢/gal on the NYMEX, while unleaded gasoline for the same month dropped 2.45¢ to 51.75¢/gal. However, the January natural gas contract gained 7.4¢ to $2.57/Mcf.
In London, the January contract for North Sea Brent crude lost 83¢ to $18.39/bbl on the International Petroleum Exchange, while the February Brent position was down 96¢ to $18.55/bbl.
The January natural gas contract inched up 0.4¢ to the equivalent of $3.84/Mcf on the IPE.
The average price for OPEC's basket of seven crudes dropped 89¢ to $17.60/bbl Thursday.