NYMEX oil ends lower, stems rally on OPEC output cut
Friday September 26, 3:38 pm ET
NEW YORK, Sept 26 (Reuters) - NYMEX crude oil futures finished lower on Friday in light, pre-weekend profit-taking from the rally of more than a dollar after this week's surprise OPEC (News - Websites)decision to cut output quotas beginning Nov. 1.
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Losses were limited amid news that Russia, the world's second largest oil exporter, may curb its oil exports if it finds prices are too low, traders said.
NYMEX November crude (CLX3) settled 13 cents lower at $28.16 a barrel, above is session low of $27.87. It rose as high as $28.35.
In London, IPE November Brent crude (LC0X3) settled 17 cents off at $26.64 a barrel, trading from $26.40 to $26.77.
"The OPEC cut of 900,000 barrels per day looks like too small to keep prices up or near $30 ... the cut may provoke some cheating by some OPEC members while Iraq's own exports are growing," said a NYMEX floor trader.
President Vladimir Putin earlier said Russia may curb oil exports to world markets if it considers the price too low, Interfax news agency reported.
"The government has instruments with the help of which we can regulate oil deliveries to world markets. Pipelines and railways are in government hands," Putin was quoted as having told U.S. businessmen. "And if we see that oil prices became unfair, we shall use the instruments."
Meanwhile, non-OPEC member Mexico said on Friday that it would maintain a crude oil export base of 1.88 million barrels per day next year, two days after the OPEC oil cartel announced a production cut to support prices.
"Mexico expects, in principle, to maintain an export platform for 2004 similar to this year's, of 1.88 million barrels per day," a statement from the energy ministry said.
Earlier, word from Norway, the world's third largest oil producer, that it sees no need to reduce its output despite the cartel's decision helped push prices lower.
NYMEX crude surged more than a dollar on Wednesday, then edged up another five cents on Thursday as the market reacted to OPEC's decision to cut production for its 10 members, excluding Iraq, to 24.5 million bpd starting Nov. 1 heading into the winter fuel season.
Now that the "emotional" reaction to the OPEC decision appears to have run its course, "we think the market will gradually shift its focus back toward the developing uptrend in U.S. crude stocks, which is likely to build more momentum in coming weeks as refiners cut runs for (autumn) maintenance turnarounds," said Tim Evans, senior energy market analyst at IFR-Pegasus in New York.
In refinery news, ConocoPhillips (NYSE:COP - News) said Friday emergency crews brought a fire under control at its oil products terminal in Cahokia, Illinois, after a lightning strike early in the morning.
Meanwhile, repairs at a 35,000-bpd coker unit at BP's (London:BP.L - News; NYSE:BP - News) its Whiting, Indiana, refinery that was shut on Thursday due to a mechanical glitch could last about a month, a a refinery source said.
NYMEX October heating oil (HOV3) settled 0.74 cent higher at 74.85 cents a gallon, trading from 73.20 to 74.20 cents.
NYMEX October gasoline (HUV3) settled 1.15 cents at 88.74 cents a gallon, moving in a range from 86.00 to 89.00 cents. |
