Sam Fletcher
Senior Writer

HOUSTON, June 11 -- Crude prices fell more than $2/bbl in profit taking June 8 on the New York market as weather and geopolitical risks to Middle East supplies dissipated.

Benchmark US crude on the New York market "managed to break through some very strong resistance lines (in its earlier rally) but could not find enough fuel and gave all the week's gain in the last day of trading," said Olivier Jakob, managing director of Petromatrix GMBH, Zug, Switzerland. The "worst performer of the complex" was the July contract for reformulated blend stock for oxygenate blending (RBOB) in gasoline, which lost 5.2% for the week the week. "RBOB gasoline is now at the extreme bottom of last summer's trading range," said Jakob.

In the Houston offices of Raymond James & Associates Inc., analysts said despite a surprisingly large build in gasoline inventories in the week ended June 1, US refinery utilization remains at a 5-year seasonal low of 89.6%. "The low refinery utilization rate should continue to make traders worry about the US gasoline inventory supply," said Raymond James analysts.

Moreover, they reported, "Weekend news that Saudi Arabia is cutting oil shipments to Asia for a ninth straight month in order to continue to comply with the Organization of Petroleum Exporting Countries' production cuts, is supporting crude prices."

Energy prices
The July contract for benchmark US light, sweet crudes dropped $2.17 to $64.76/bbl June 8 on the New York Mercantile Exchange. The August contract fell by $2.29 to $65.45/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by $2.17 to $64.76/bbl. Heating oil for July delivery lost 7.76¢ to $1.90/gal on NYMEX. The July RBOB contract dropped 6.56¢ to $2.13/gal.

The July natural gas contract lost 16.2¢ to $7.66/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 34.5¢ to $7.54/MMbtu.

In London, the July IPE contract for North Sea Brent crude fell $2.62 to $68.60/bbl. Gas oil for June delivery lost $11.75 to $605.75/tonne.

The average price for OPEC's basket of 11 benchmark crudes dropped 89¢ to $66.12/bbl on June 8. So far this year, OPEC's basket price has averaged $58.72/bbl, compared with $61.08/bbl for all of 2006.

Contact Sam Fletcher at samf@ogjonline.com.