Sam Fletcher
Senior Writer
HOUSTON, Jan. 9 -- Energy futures prices bumped up Thursday as lower-than-normal temperatures in the Northeast US, the world's largest market for heating oil, raised concerns about US commercial inventories of crude, which are now at a 28-year low.
The US Energy Information Administration reported early Wednesday that US oil stocks fell by 1.7 million bbl to 269 million bbl during the week ended Jan. 2 (OGJ Online, Jan. 8, 2004). The lowest comfort level for US crude stocks is generally considered to be 270 million bbl.
"We doubt very much that the US oil system is running at any more than 1 day of spare inventory above minimum [operating level]," said Paul Horsnell, head of energy research, at Barclays Capital Inc., London.
Energy prices
The February contract for benchmark US light, sweet crudes climbed by 36¢ to $33.98/bbl Thursday on the New York Mercantile Exchange, while the March position advanced by 33¢ to $33.73/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., gained 35¢ to $33.98/bbl.
Unleaded gasoline for February delivery jumped by 2.92¢ to 99.01¢/gal Thursday on NYMEX. Heating oil for the same month was up by 1.8¢ to 98.41¢/gal. The February natural gas contract escalated by 21.6¢ to $7.09/Mcf on NYMEX Thursday, despite a bearish EIA report that only 52 bcf of natural gas were withdrawn from US underground storage during the week ended Jan. 2 because of mild weather and weak holiday demand.
That gas withdrawal number was "well below estimates and far less than the 154 bcf average decline for the [same] week over the past 5 years," said analysts Friday at Enerfax Daily.
"The [Thursday gas futures] market opened steady and initially rose, but dipped down to about $6.60[/Mcf] after the storage report was released and then turned around on cold weather forecast for the Northeast later this week, closing on the upswing," Enerfax reported. "The coldest weather of the winter is coming up in the next 2 weeks and that may produce some big withdrawal numbers in the weeks to come."
In London, the February contract for North Sea Brent oil gained 32¢ to $31.08/bbl on the International Petroleum Exchange. Gas oil for January delivery lost $1.75 to $285.25/tonne, but the February natural gas contract advanced by 7.3¢ to the equivalent of $5.47/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes increased by 18¢ to $30.41/bbl Thursday.
Contact Sam Fletcher at [email protected]
