Energy prices dip in market adjustment

By OGJ editors

HOUSTON, Dec. 17 -- Energy prices fell slightly Thursday in a general adjustment of the market but held on to most of the large gains from the previous session when prices spiked on a bullish report of US inventories.

Forecasts of a major snowstorm next week in the Northeast US, the world's biggest market for heating oil, and expectations that cold weather could hang on through early January helped temper Thursday's declines, said analysts.

Energy prices
The January contract for benchmark US light, sweet crudes dipped by 1¢ to $44.18/bbl Thursday on the New York Mercantile Exchange, while the February contract dropped 18¢ to $44.51/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., slipped by 1¢ to $44.19/bbl. Gasoline for January delivery lost 2.39¢ to $1.14/gal Thursday on NYMEX. Heating oil for the same month was down by 0.72¢ to $1.38/gal.

The January natural gas contract plunged by 23.6¢ to $7/Mcf Thursday, "pressured by a soft cash [spot gas] market, milder late-week forecasts, and high storage inventories," said analysts Friday at Enerfax Daily. The Energy Information Administration reported the withdrawal of 61 bcf of natural gas from US underground storage in the week ended Dec. 10. That was below the consensus forecast by Wall Street analysts and compared with withdrawals of 88 bcf the previous week and 134 bcf a year ago. US storage now stands at 3.15 tcf, up by 300 bcf from a year ago and 394 bcf above the 5-year average.

In London, the January contract for North Sea Brent crude declined by 77¢ to $41.45/bbl on the International Petroleum Exchange.

The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes increased by 37¢ to $36.84/bbl Thursday.

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