HOUSTON, Dec. 23 -- Natural gas futures prices plunged on the New York Mercantile Exchange Monday, and the prices for the rest of the energy complex continued a downward slide.
Traders blamed forecasts calling for above-normal temperatures across most of the US during the next few days. Thin trading volumes also negatively affected prices. Many market participants as of Monday already were taking time off for holidays.
Natural gas prices had been soaring, but analysts said that mild forecasts halted that rally.
The January natural gas contract dropped 65.8¢ to $6.324/Mcf Monday, pressured by mild weather forecasts and a weak cash market, Enerfax Daily analysts said Tuesday.
"Cash was the leader down. There is no cold weather this week, and the forecast is mild as well. The technicals look bearish and could lead to more downside unless temperatures turn colder," they said.
Meanwhile, an earthquake rocked the central coast of California Monday, but initial reports from oil companies indicated no damage to oil pipelines or refineries.
Algerian energy and Mines Minister Chakib Khelil told OPEC News Agency that he was concerned with the falling value of the dollar against the euro, adding that many oil producers had registered losses of 30% in terms of purchasing power.
In the last several weeks, the euro repeatedly set highs against the dollar. Analysts have said they anticipate the dollar weakness will continue going into early 2004.
Other energy prices
The February contract for benchmark sweet, light crudes on the New York Mercantile Exchange Monday declined $1.15/bbl to $31.87/bbl. The March contract declined by $1.03/bbl to $31.52.
On the US spot market, West Texas Intermediate at Cushing, Okla., settled at $31.98/bbl Monday, down $1.05/bbl.
Heating oil for January lost 4.38¢ to finish at 89.41¢/gal Monday on NYMEX. Unleaded gasoline for the same month plunged 3.52¢ to 87.17¢/gal.
In London, the February contact for North Sea Brent oil lost $1.06 to $28.99/bbl Monday on the International Petroleum Exchange. Gas oil for January delivery gained $2.25 to $276.25/tonne.
The January natural gas contract lost 15¢ to the equivalent of $5.80/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes on Monday dropped by $1.09 to $29.62/bbl.