Market watch, July 27

Energy futures prices closed mixed in trading on the New York Mercantile Exchange Wednesday, with bullish inventory numbers from the American Petroleum Institute putting downward pressure on most prices. According to the weekly inventory report released by API after the end of trading on Tuesday, the nation's crude stocks added 1.88 million bbl to end at 293.75 million bbl.


Energy futures prices closed mixed in trading on the New York Mercantile Exchange Wednesday, with bullish inventory numbers from the American Petroleum Institute putting downward pressure on prices.

According to the weekly inventory report released by API after the end of trading on Tuesday, the nation's crude stocks added 1.88 million bbl to end at 293.75 million bbl. As a result, NYMEX crude oil September delivery lost 14� Wednesday to settle at $27.81/bbl, while the October contract stood at $27.63, down 10�.

Meanwhile, home heating oil stocks rose by 1.73 million bbl and gasoline inventories by 1.71 million bbl. Products prices did not decline on the bearish inventory numbers, however, because of a reported problem at Tosco Corp.'s New Jersey refinery.

Traders apparently are giving more weight to the refinery problems because of the tight stocks situation in the US. Refined petroleum products ended higher in New York, with August home heating oil rising 0.31� to finish at 76.26�/gal and unleaded gasoline for the same month advancing 2.15� to rest at 89.25�.

Meanwhile, the American Gas Association reported a 54 bcf injection of natural gas into storage last week�somewhat lower than expected. As a result, NYMEX Henry Hub natural gas for August delivery rose 10.3� to end at $3.76/Mcf.

Meanwhile in London trading, Brent crude oil futures fell Wednesday on the International Petroleum Exchange towards the close of trading in response to growing US oil inventories, despite having been boosted earlier by reports of problems at the Tosco refinery. September Brent settled at $26.83/bbl on the IPE, down 11� from the previous close. The day's high was $27.45/bbl, and the low, $26.78.

Brokers said the market is nervous and tending to react strongly to bearish reports and rumors. Many expect further action by the Organization of Petroleum Exporting Countries to raise production if prices rise close to $29/bbl again, and this has encouraged selling.

Also in London, the August contract for natural gas fell 2� to close at $2.77/Mcf. August gas oil ended slightly higher at $245.75/tonne, up 75� from the previous close on the IPE, with a day's high of $247 and a low of $241.75. But gas oil is expected to sink to catch up with crude oil's late-day fall.

North Sea Brent crude oil futures prices closed mixed on the Singapore exchange as well, with market players not indicating a clear trend. Brent crude for September lost 11� to settle at $26.83/bbl in Singapore, after having added 24� during the previous session. The October contract rose to $26.90/bbl, however.

Traders said the general Asian energy markets sought a clearer direction. The only major surge in demand was the shortage of gasoline in Indonesia that brought some relief to Singapore, Malaysia, and Thailand refineries, which have been operating under capacity for the past few months (OGJ Online, July 25, 2000). Otherwise, market talks and interpretations of energy demand and supply were the main focus, traders said.

The price of the OPEC basket of seven crudes stood at $25.17/bbl Wednesday, compared with $25.40 the previous day, according to the OPEC secretariat.

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