Updated Thu Jun 18 16:46 ET
Full: NYMEX Oil Review: Crude resumes skid after Wed rally
By Glen C. Carey, Bridge News
New York--Jun 18--NYMEX oil crude futures plunged today as sellers
pushed the Jly contract through key technical supports ahead of Monday's
expiration. Wednesday's rally was reversed as the market refocused on
bearish fundamentals, brokers said. Jly crude settled down 83 cents at
$11.77. Jly heating oil settled down 41 points at 36.91c, while Jly
gasoline settled down 67 points at 45.84c.
* * *
The approaching expiration of the Jly contact has pressured the
contract as speculators liquidate their contracts rather than take
delivery.
"Aggressive players are more apt to be on the selling side," a broker
said. "We are heading into expiration, and there seems like there is a lot
of crude to be delivered." Another broker added, "There is no other news
and a lot of liquidation."
Another factor pressuring the market is the skepticism over commitments
by major world oil producers to cut oil production. Brokers have indicated
that the market needs to see cuts closer to the 1.5 million bpd, but so far
OPEC and non-OPEC countries only have committed to cuts totalling 803,000
bpd.
OUTLOOK:
On the technical side, selling accelerated as Jly crude broke through
key support levels at Tuesday's high of $12.35 and Wednesday's low of
$12.05. "We broke through support so early," a broker said. "Now the bigger
trend is down."
With the market having pushed the contract back down to the lower
levels seen on Monday and Tuesday, the next support level is pegged at
$11.55, the low reached on Tuesday. "We are very much back down to the
lower levels," a broker said.
Brokers have cited resistance around $12.35, the high reached on
Wednesday. For the contract to stay above $12.00, and hold, Jly crude needs
to push above $12.50. "The market really needs to settle above $12.50 to
test higher levels," a broker said.
UPCOMING:
--OPEC ministers begin gathering in Vienna over the weekend for their
biannual meeting, set to begin Jun 24.
--Venezuelan Oil Minister Erwin Arrieta will arrive in Norway Saturday, as
scheduled, to meet with oil industry representatives and Norway's oil
minister.
--Iraqi Deputy Prime Minister Tariq Aziz is to visit Spain on Saturday as
part of Iraq's effort to lobby Europe for lifting UN economic sanctions.
--NYMEX Jly crude futures expire Monday. Jly product options expire Jun 25,
and Jly products futures expire Jun 30. Aug crude options expire Jly 16.
IN THE NEWS:
Number Headline
------ --------
.16503 PDVSA's Giusti: Venezuela aims for for $17.00 WTI average for 1998
.14130 OPEC: Russia's Telegina to attend OPEC meet as observer
.15301 IRAQ: Russia doesn't see parts issue resolved this week
.14464 IRAQ: Baghdad wants current round to be last of UN oil deal
.14632 IRAQ: UN says Iraq sales may not meet humanitarian target
.14292 Shell Ill. 47,000-bpd catcracker restart delayed by snag
.16084 Wynnewood Okla. refinery 18,000-bpd catcracker seen up Friday
IN NYMEX TRADING TODAY:
CONTRACT MONTH TICKER SETTLEMENT CHANGE TOTAL EST. VOLUME
Futures Options
Crude Jly CLN8 $11.77/bbl - 83c 126,956 29,180
Aug CLQ8 $13.13/bbl - 56c
Heating Oil Jly HON8 36.91c/gal - 41 pts 33,746 1,924
Aug HOQ8 38.05c/gal - 55 pts
Gasoline Jly HUN8 45.84c/gal - 67 pts 31,879 2,328
Aug HUQ8 46.86c/gal - 59 pts
Brent Aug OILQ8 $12.78/bbl - 28c
Sep OILU8 $13.38/bbl - 29c
End |
