Crude prices drop slightly, but still above $32 a barrel

Posted: Wednesday, June 14, 2000

NEW YORK (AP) -- Crude oil prices dropped slightly Wednesday on the New York Mercantile Exchange after reaching their highest levels in three months on speculation that OPEC would not increase oil production.

The decline occurred despite new data from both the American Petroleum Institute and the Department of Energy indicating that crude oil supplies fell last week.

West Texas intermediate crude for July delivery fell 25 cents to $32.27 a barrel on the NYMEX after moving as high as $32.85 a barrel on Tuesday, its highest since March 8. On the International Petroleum Exchange in London, July Brent crude from the North Sea fell 51 cents to $30.98 a barrel.

July unleaded gasoline futures, meanwhile, rose 0.58 of a cent to $1.0680, which doesn't bode well for U.S. motorists already facing skyrocketing prices. The price on the futures exchange does not reflect state and federal taxes or retail markups.

Some motorists in the Midwest are paying more than $2 a gallon for gasoline.

Members of the Organization of Petroleum Exporting Countries have sent conflicting signals about whether they plan to increase oil production at their next formal meeting on June 21 in Vienna.

Less than three months after a much-anticipated production hike halted a yearlong price rally, OPEC had been widely expected to raise output again. Prices last week soared to levels that would have triggered a production hike of 500,000 barrels daily under a formula adopted in March.

But the oil cartel balked, claiming high prices were more a product of a U.S. shortage linked to strict new requirements for reformulated gasoline than any worldwide shortage.

''It looks like we're going to continue to move higher,'' said Tom Bentz, an energy analyst for Paribas Futures in New York, said Tuesday. ''I don't see anything on the horizon that's going to change the gasoline picture overnight.''

Meanwhile, two new reports indicate that oil supplies are tightening. API, an industry trade organization, said late Tuesday that supplies dropped 2.1 million barrels last week. In a report Wednesday morning, the government also indicated that supplies had dropped, but by a relatively smaller 1.4 million barrels.

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