Oil Prices Fall After Natural-Gas Drop
Friday September 15, 8:43 am ET
Crude-Oil Prices Fall After Natural Gas Plunges to 2-Year Low and Nigeria Strike Ends
LONDON (AP) -- Crude-oil prices eased Friday after natural gas prices plunged to a two-year low, and supply concerns eased after Nigerian oil workers prematurely ended a strike in Africa's largest producer.
OPEC, meanwhile, sharply lowered its expectations for demand for its crude, increasing the prospect that the group may reduce its production quotas later this year. In its monthly oil market report, the Organization of Petroleum Exporting Countries cut expected need for its oil in the last three months of this year by 320,000 barrels a day from its month-ago estimate, to 28.86 million barrels per day.
Light, sweet crude for October fell 10 cents to $63.12 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe, after hitting $63 a barrel earlier in the session. Brent crude dropped 9 cents to $63.45 on the ICE Futures Exchange in London.
In other Nymex trading, natural gas was flat at $4.886 per 1,000 cubic feet, heating oil was up less than half a cent at $1.7150 a gallon and unleaded gasoline was up nearly a cent at $1.5610 a gallon.
On Thursday, natural gas futures plunged 10 percent to a two-year low after U.S. government data showed record supplies.
The "selling was about natural gas prices," said analyst Phil Flynn at Alaron Trading Corp. "The Nigerian news was another reason to sell."
Nigerian oil workers ended a three-day strike a day early to negotiate for better security conditions in the Niger Delta.
The strike, which started Wednesday, was prompted by the recent deaths of two oil company employees, and growing concern about worker safety in the oil-rich delta region.
Nigeria is Africa's largest crude exporter and the fifth-largest supplier to the United States. Attacks and kidnappings in its Niger River delta have cut production by nearly 900,000 barrels since the beginning of the year.
Geopolitics, which helped push prices to an all-time high of $78.40 in July, could still force a spike, Fimat USA analyst John Kilduff said in a research note.
"In the end, our bias still has to remain with the upside," said Kilduff. "It is only for the moment that psychology has shifted more to an economic track, and even there, we don't see the global economy breaking down, only a softening at the margins."
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