Market watch, Aug. 2

Energy futures prices rose sharply in trading on the New York Mercantile Exchange Tuesday. Crude oil prices in particular were boosted by news that the Organization of Petroleum Exporting Countries might not raise production to lower prices.


Energy futures prices rose sharply in trading on the New York Mercantile Exchange Tuesday. Crude oil prices in particular were boosted by news that the Organization of Petroleum Exporting Countries might not raise production to lower prices.

Al�odr�ez Araque, OPEC president and Venezuela's energy minister, circulated a letter confirming that a crude oil output increase would not be necessary because the OPEC basket price had fallen below the upper limit of the price band control mechanism.

At the OPEC meeting in June, it was announced the organization would raise or lower its production in 500,000 b/d increments if the OPEC basket oil price remained outside a band of $22-28/bbl for more than 20 days (OGJ Online, June 16, 2000).

In New York trading, NYMEX crude oil for September delivery gained 36� to settle at $27.79/bbl, while the October contract gained 27� to close at $27.58.

Also in New York, natural gas for September delivery added 21.3� to end at $3.99/Mcf.

News of problems at a BP refinery in Texas added to US gasoline supply concerns that began last week with complications at a New Jersey refinery. As a result, unleaded gasoline for September gained 2.34� to finish at 87.21�/gal.

Other refined petroleum products rose as well, with September home heating oil increasing by 1.19� to settle at 76.84�/gal.

Meanwhile, on the International Petroleum Exchange in London, September Brent crude oil futures settled higher�up 21� to $27.14/bbl. The day's high was $27.45 and the low was $26.73.

On the IPE, the September natural gas contract closed at the equivalent of $2.40/Mcf, down 6�. The August gas oil contract settled at $240/tonne, up 50� from the previous close. The day's high was $240.50/tonne, and the low was $234.

On the Singapore exchange, prices rebounded as well. The news that Indonesian state oil and gas firm Pertamina entered the market to buy 2 million bbl of gasoline to ease the country's fuel shortage helped buoy the market, traders said.

As the day ended, Singapore Brent crude for September settled at $27.14/bbl, up 21�/bbl, while the October contract added 6� to close at $26.76.

The price of the OPEC basket of seven crudes stood at $25.54/bbl Tuesday, compared with $25.17 the previous day, according to OPEC Secretariat calculations.

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