Jul 20--NYMEX energy futures are seen lower ahead of the
expiration of Aug crude futures contracts today and the release of American
Petroleum Institute data, which are expected to show a rise in crude stockpiles
last week. Trade is expected to be choppy and rangebound with expiring Aug crude
testing support at $20.15 and later at $20.00.
* * *
NYMEX Aug crude ended the overnight Access session down 18c at $20.26. Aug
heating oil ended down 36 points at 51.00c, while Aug gasoline ended down 54
points at 61.25c.
"It's going to open up lower in profit-taking with Aug crude going off the
board today," a broker said. "It's definitely going to be a choppy day similar
to yesterday."
The spread between the expiring contract and Sep crude is expected to widen
today as participants roll over their positions in the final session of the Aug
contract. "We're buying Sep contracts and selling Auggie," a broker said.
"You're going to see the spread blow out maybe about 30 cents."
The market is also focusing on the release of API data with expectations for
crude stockpiles to have risen 1.5-2.5 million barrels last week, according to
most brokers and analysts. The market will likely come u
nder pressure if this expectation is confirmed.
But inventories of gasoline are anticipated to have dropped 1.0-2.0 million
barrels last week, while distillates--which include heating oil and diesel
fuel--are expected to have risen 1.0-2.0 million barrels. Refinery runs are
expected to have risen 0.2-0.5% points. (Story .1885)
Meanwhile, Valero confirmed it shut Sunday its 52,000-barrel-per-day fluid
catalytic cracking unit at its 160,000-bpd Texas City, Texas, refinery because
of a mechanical problem. Repairs are seen completed in 5-7 days. The FCC unit
was running at full capacity before the shutdown. (Story .20196)
Also, tensions heighten in Iraq as Baghdad today angrily dismissed the US
argument that its air strikes were in self-defense, after officials said 17
civilians died in the south of the country, many of them burnt to death in their
cars. The US "continues to term its aggressions against Iraq as acts of
self-defense, but honest commentators are disgusted by such words which are
nothing more than an insult," said Al-Qadissiya, an official daily. (Story
.12773)
UPCOMING:
--Aug crude futures expire today. Sep crude options expire Aug 17.
--Aug product options expire Jul 27, while Aug products expire Jul 30.
--API data are expected after 1600 ET Tuesday, while the US Department of Energy
data are expected after 0900 ET Wednesday.
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