International energy futures fell Wednesday, influenced by US traders' bearish reaction to forecasts of warmer weather for the Midwest in the wake of early winter storms through much of this week.
The January contract for benchmark US light, sweet crudes dropped 94� to $28.74/bbl on the New York Mercantile Exchange, while the February contract was down 98� to $28.12/bbl. But both contracts rebounded a little in after-hours electronic trading, moving up to $28.89/bbl and $28.21/bbl respectively.
NYMEX home heating oil for January delivery plunged 5.15� to 90.97�/gal Wednesday. The January contract for unleaded gasoline also lost 0.92� to 75.61�/gal.
The natural gas contract for January fell 60.8� to $7.537/Mcf on the NYMEX, despite the fact that gas storage levels are now 588 bcf, or 21%, lower than a year ago.
The American Gas Association reported 158 bcf of gas were pulled out of underground storage last week, compared with withdrawals of 73 bcf during the same period in 1999 and 49 bcf in 1998.
Over the first 5 weeks of this winter, US temperatures averaged 38% colder than in the same period last year and 22% below the 10-year average.
In London, the January contract for North Sea Brent crude plummeted $1.92 to close at $25.14/bbl on the International Petroleum Exchange. That sell-off began in the afternoon after floor trading on the NYMEX resumed for the day and was dictated by price drops in New York, analysts reported.
But even allowing for the bearish fundamentals of the current market, they said, the price drop was probably overdone. A correction back toward $26/bbl is expected.
The January contract for natural gas gained 13� to the equivalent of $4.50/Mcf on the IPE.
The average price of the Organization of Petroleum Exporting Countries' basket of seven crudes dropped 37� to $24.78/bbl on Wednesday.
