Energy futures prices jumped again Tuesday and are likely to continue climbing Wednesday with reports of inventory declines in the face of early cold weather, analysts said.
Momentum from earlier price hikes resulting from cold US weather and Middle East tensions pushed up the November contract for benchmark US light, sweet crude by $1.32 to $33.18/bbl Tuesday on the New York Mercantile Exchange. The December contract also gained $1.22 to $33.07/bbl.
The American Petroleum Institute's report of lower oil and distillate inventories, released after the market closed Tuesday, caused prices for both contracts to continue to climb in after-hours electronic trading. The November contract was fetching $33.86/bbl in late trading, while the December contract was at $33.72/bbl.
The November contract for home heating oil closed at 99.71�/gal Tuesday, up 4.22� for the day, while unleaded gasoline for the same month jumped 4.5� to 91.41�/gal on the NYMEX. However, the November position for natural gas lost 1.6� to $5.13/Mcf.
In its weekly report, the API said US stockpiles of crude declined by 3.93 million bbl last week, while distillate stocks�including home heating oil�dropped by 2.31 million bbl during the same period.
The Northeast US is the world's biggest market for home heating oil. Temperatures in the eastern US recently have fallen by about 15 degrees Centigrade several weeks earlier than normal, said analysts.
In London, the November contract for North Sea Brent crude jumped $1.09 to $31.85/bbl on the International Petroleum Exchange. The natural gas contract for the same month gained 5� to the equivalent of $4.02/Mcf.
The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes gained $1.10 to $30.54/bbl.
Meanwhile, Qatar's energy minister said Tuesday that surplus supplies of oil may force OPEC to reduce its production in the second quarter of 2001.
Minister Abdullah Bin Hamad Al Attiyah said international oil stocks are growing at a rate of 2 million b/d. "If this rate continues, oil prices could come under pressure in the second half of next year. We are closely monitoring the market situation," he said.
