tigerhonaker
10-01-2006, 04:42 AM
Oil prices fall below $63
as traders remain watchful
of OPEC's intentions
NEW YORK (AP) -- Oil prices fell below $63 a barrel Thursday after initially rising to $64, as traders tried to gauge the possibility of an OPEC production cut.
With oil prices down roughly 20 percent since surpassing $78 a barrel in mid-July, many traders fear OPEC will want to reduce supply to keep revenues up.
Still, no one knows for sure, and the result was an energy market seesaw.
Light sweet crude for November delivery fell 20 cents to settle at $62.76 a barrel, after peaking at $64 earlier in the day. The contract had risen nearly $2 on Wednesday.
"It was a competing rumor mill today," said Fimat USA analyst John Kilduff said. He noted that OPEC president Edmund Daukoru dismissed reports that the 11-nation group has decided to make cuts, but recent tanker reports have suggested a slight decrease in production, and export reductions are expected out of Nigeria.
Nigeria, Africa's biggest oil exporter, has blocked much of its production this year due to militant attacks on oil facilities and kidnappings of oil workers.
Instead of an official production cut from the Organization of Petroleum Exporting Countries -- which kept its production ceiling steady at its Sept. 11 meeting at 28 million barrels a day -- some member countries may decide to make unofficial reductions, Kilduff said.
"There's a real sense that the market could collapse, the way natural gas has collapsed, for example. But an outright defense of over $60-a-barrel oil is politically impossible," he said.
Meanwhile Thursday, natural gas futures slid after the U.S. government reported that inventories of natural gas -- the nation's most common home heating fuel -- climbed last week.
"At this point, I don't see a bottom for natural gas," said Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York. "If we see earlier-than-normal cold weather, that could stop things."
U.S. storage of natural gas rose last week by 77 billion cubic feet to 3.254 trillion cubic feet, according to the Energy Information Administration. That's 12 percent above the 5-year average.
The figure was close to what analysts were expecting. A Dow Jones Newswires survey of 23 analysts and traders forecast an average increase of 83 billion cubic feet.
Natural gas futures for November delivery fell 27.7 cents to settle at $5.392 per thousand cubic feet Thursday on Nymex.
The October natural gas contract, which just expired, had plummeted 7 percent Wednesday to settle at $4.201 per 1,000 cubic feet -- the lowest close since Dec. 3, 2002.
U.S. inventories of natural gas are high due to last year's mild winter. Prices have dropped because of these ample inventories, as well as this year's tame hurricane season.
Oil inventories are also high. A weekly U.S. Energy Department petroleum supply snapshot showed Wednesday that U.S. crude inventories are 5 percent higher than last year; gasoline inventories are 9 percent above last year; and distillate fuels, which include heating oil and diesel, are 15 percent above last year.
In other Nymex Thursday, heating oil prices fell 0.66 cent to settle at $1.7075 a gallon, while unleaded gasoline futures fell nearly 4 cents to settle at $1.5011 a gallon.
The average U.S. retail price of a gallon of unleaded, regular gasoline fell to $2.342 Thursday -- down from $2.356 on Wednesday, and down from $2.840 a month ago, according to AAA.
Brent crude on London's ICE futures exchange rose 33 cents to settle at $62.54 a barrel Thursday.
http://www.siouxcityjournal.com/articles/2006/09/29/news_business/local/0cddb2286516601e862571f8000f2f47.txt
as traders remain watchful
of OPEC's intentions
NEW YORK (AP) -- Oil prices fell below $63 a barrel Thursday after initially rising to $64, as traders tried to gauge the possibility of an OPEC production cut.
With oil prices down roughly 20 percent since surpassing $78 a barrel in mid-July, many traders fear OPEC will want to reduce supply to keep revenues up.
Still, no one knows for sure, and the result was an energy market seesaw.
Light sweet crude for November delivery fell 20 cents to settle at $62.76 a barrel, after peaking at $64 earlier in the day. The contract had risen nearly $2 on Wednesday.
"It was a competing rumor mill today," said Fimat USA analyst John Kilduff said. He noted that OPEC president Edmund Daukoru dismissed reports that the 11-nation group has decided to make cuts, but recent tanker reports have suggested a slight decrease in production, and export reductions are expected out of Nigeria.
Nigeria, Africa's biggest oil exporter, has blocked much of its production this year due to militant attacks on oil facilities and kidnappings of oil workers.
Instead of an official production cut from the Organization of Petroleum Exporting Countries -- which kept its production ceiling steady at its Sept. 11 meeting at 28 million barrels a day -- some member countries may decide to make unofficial reductions, Kilduff said.
"There's a real sense that the market could collapse, the way natural gas has collapsed, for example. But an outright defense of over $60-a-barrel oil is politically impossible," he said.
Meanwhile Thursday, natural gas futures slid after the U.S. government reported that inventories of natural gas -- the nation's most common home heating fuel -- climbed last week.
"At this point, I don't see a bottom for natural gas," said Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York. "If we see earlier-than-normal cold weather, that could stop things."
U.S. storage of natural gas rose last week by 77 billion cubic feet to 3.254 trillion cubic feet, according to the Energy Information Administration. That's 12 percent above the 5-year average.
The figure was close to what analysts were expecting. A Dow Jones Newswires survey of 23 analysts and traders forecast an average increase of 83 billion cubic feet.
Natural gas futures for November delivery fell 27.7 cents to settle at $5.392 per thousand cubic feet Thursday on Nymex.
The October natural gas contract, which just expired, had plummeted 7 percent Wednesday to settle at $4.201 per 1,000 cubic feet -- the lowest close since Dec. 3, 2002.
U.S. inventories of natural gas are high due to last year's mild winter. Prices have dropped because of these ample inventories, as well as this year's tame hurricane season.
Oil inventories are also high. A weekly U.S. Energy Department petroleum supply snapshot showed Wednesday that U.S. crude inventories are 5 percent higher than last year; gasoline inventories are 9 percent above last year; and distillate fuels, which include heating oil and diesel, are 15 percent above last year.
In other Nymex Thursday, heating oil prices fell 0.66 cent to settle at $1.7075 a gallon, while unleaded gasoline futures fell nearly 4 cents to settle at $1.5011 a gallon.
The average U.S. retail price of a gallon of unleaded, regular gasoline fell to $2.342 Thursday -- down from $2.356 on Wednesday, and down from $2.840 a month ago, according to AAA.
Brent crude on London's ICE futures exchange rose 33 cents to settle at $62.54 a barrel Thursday.
http://www.siouxcityjournal.com/articles/2006/09/29/news_business/local/0cddb2286516601e862571f8000f2f47.txt