Energy futures prices shot up Monday, as predictions of severe blizzards bearing down on the US Midwest triggered expectations of increased demand for heating oil and natural gas, analysts reported.
With storage inventories of natural gas near record lows going into the winter, gas supplies could be vulnerable if widespread freezing forces curtailments in key producing regions such as Texas.
The January contract for natural gas jumped 82.9� to close at a record $9.413/Mcf on the New York Mercantile Exchange, after trading as high as $9.86/Mcf Monday.
Home heating oil for January also gained 3.85� to 98.27�/gal, while unleaded gasoline for the same month was up 2.88� to 76.54�/gal.
Benchmark US light, sweet crudes for January delivery rebounded by $1.06 to $29.50/bbl Monday on the NYMEX, while the February contract added 95� to $29.04/bbl. Both contracts continued to climb in after-hours electronic trading to $29.80/bbl and $29.27/bbl, respectively.
The soaring NYMEX market also pulled up the International Petroleum Exchange in London, where the January contract for North Sea Brent crude settled at $27.54/bbl Monday, up 98� for the day after trading as high as $27.60/bbl.
However, brokers claim the London market remains in a basically bearish mood. They predicted prices soon would fall back to the $26/bbl level.
The January natural gas contract was up 11� to the equivalent of $4.23/Mcf Monday on the IPE.
On the Singapore Exchange, North Sea Brent crude rose 98� to $27.54/bbl for the January position, and rose 81� to $27.46/bbl for the February position.
Meanwhile, Kuwaiti Minister of Oil Saud Nasser Al-Sabah suggested members of the Organization of Petroleum Exporting Countries might cut production by 1 million b/d to stop the recent slump in oil prices. That cut could come in the spring when international demand drops, he said.
The average price for OPEC's basket of seven crudes increased 63� to $25.42/bbl Monday.
