By OGJ editors
HOUSTON, Dec. 3 -- Crude oil and natural gas future prices both rallied on the New York Mercantile Exchange Tuesday upon international uncertainities and winter weather in part of the US.
Oil traders said they were concerned about reports of increasing violence in Iraq and indications of the resistance becoming more organized. These difficulties could mean a long wait before crude exports are restored to prewar levels, they said.
Natural gas traders said the focus was on cold weather forecasts for the US Northeast, a region that relies heavily upon heating oil.
Meanwhile, the Organization of Exporting Countries planned an extraordinary meeting Thursday in Vienna.
"We maintain the view that the fundamental balances are not as bearish as the consensus view. Expect, at the very least, a strong hint from ministers of cuts in January," said Paul Horsnell of Barclays Capital Inc. in London.
Energy prices
The January contract for natural gas jumped by 29.6¢ to $5.58/Mcf Tuesday on NYMEX.
"Cold Northeast weather pushed cash prices to 5-month highs," analysts said Wednesday at Enerfax Daily. "The January contract has surged more than 13% in the last two sessions."
The January contract for benchmark US light, sweet crudes gained 83¢ to $30.78/bbl Tuesday, while the February contract rose by 82¢ to $30.62/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was at $30.78/bbl Tuesday, up from $29.98/bbl on Monday.
During Tuesday trading, light, sweet crudes for January delivery reached $30.97/bbl before settling back down by the close.
Refined products also closed higher. Unleaded gasoline for January delivery gained by 2.01¢ to 84.18¢/gal Tuesday on NYMEX. Heating oil for the same month jumped 2.86¢ to 86.26¢/gal.
In London, the January contract for North Sea Brent oil rose by 69¢ to $28.94/bbl Tuesday on the International Petroleum Exchange. Gas oil for December delivery gained $850 to $255.50/tonne. The January natural gas contract lost 16¢ to the equivalent of $5.63/Mcf on IPE.
The average price for OPEC's basket of seven benchmark crudes gained 51¢ to $28.43/bbl Tuesday.
