Energy Futures Prices Lower in Reaction to World Oil Glut

Energy futures prices closed mostly lower Monday as traders reacted negatively to the abundant supplies of oil on world markets.

The August contract for West Texas Intermediate, the benchmark U.S. crude oil, fell 15 cents to $15.86 per 42-gallon barrel on the New York Mercantile Exchange.

Among refined products traded on the exchange, the July contract for home heating oil slipped 0.55 cent to 42.59 cents a gallon. The July contract for unleaded gasoline rose 0.14 cent to 51.05 cents a gallon, but gasoline contracts for all other months fell.

John Azarow, a trader for Shearson Lehman Hutton Inc., said prices fell in response to a report that United Arab Emirates oil officials want to raise the oil production ceiling imposed on their country by the 13-nation Organization of Petroleum Exporting Countries.

The UAE’s current quota is 940,000 barrels of crude a day, but the emirates are already producing 1.3 million barrels daily. The UAE’s oil council wants to raise its official ceiling to 1.5 million barrels a day, Azarow said.

The prospect of further expansion of the worldwide oil glut sent prices lower in New York, Azarow said.

Gasoline prices, which rose last week as crude prices dropped, apparently fell victim to profit-taking, Azarow said. The declines in later-month contracts for gasoline accelerated the drop in crude prices, he said.

“It made the crude market even more nervous,” Azarow said.