6/12/98 Crude-Oil Futures Settle Lower, Petroleum Products Higher On Ny
NEW YORK -(Dow Jones)- Crude-oil futures finished lower for the fifth straight session, while petroleum-products futures ended a bit higher Friday on the New York Mercantile Exchange.
July crude oil lost 16 cents to settle at $12.59 a barrel. August crude oil dipped 3 cents to end at $13.89 a barrel. July futures slid 16% for the week, nearing the nine-and-a-half-year low of $12.50 set May 19.
Among products: July unleaded gasoline edged up 0.27 cent to end at 46.30 cents a gallon. July heating oil tacked on 0.07 cent to finish at 38.12 cents a gallon.
July natural gas finished up 6.5 cents at $2.035 per million BTUs.
"It's been a pretty brutal week," said a trader at a major oil firm.
First-quarter gross domestic product in Japan was reported down 1.3% from the previous quarter, when GDP also declined. Many economists define recession as two consecutive declines in a nation's economic output.
"This is a major concern for the oil market. Asia has been the key market of growth for world petroleum, providing around 10% growth in oil demand per year for the last decade. The longer the recovery in that region is delayed, the longer the world oil market will remain soft," said one analyst.
The other concern is that Asia's woes will put a break on the U.S. market, the world's largest for oil and oil products. "Oil demand expands with the economy. Slow economic growth means lower oil demand," said the analyst.
"Asia has been weighing on the market this week. Original estimates said the region would start to recover in six months, then it was a year, now it looks even more gloomy," said Victor Yu, an energy analyst with Refco Inc.
Comments from Venezuelan oil minister Erwin Arrieta that OPEC's second round of production cuts total 650,000 barrels a day, including a cut from Kuwait, were dismissed by traders. The statement was surprising as Kuwait hasn't yet officially announced a production cut. The cuts that have been secured since last Thursday, when Saudi Arabia, Venezuela and Mexico agreed to lower production by 450,000 barrels a day and lobby other producers to reduce output, come to 570,000 barrels. That suggests that Kuwait will cut by a modest 80,000 barrels a day, short of the 100,000-150,000 barrels a day in cuts that analysts had expected from the country.
Algeria said it would announce a production cut of 25,000 barrels a day at the OPEC meeting on June 24, a figure not yet considered official.
Some analysts expect more production-cut announcements to come from the Gulf Cooperation Council meeting next Tuesday, which will include oil ministers from Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
|
