MARKET WATCHEnergy prices jump with Northeast US cold weather

Jan. 19, 2004
Oil prices jumped in New York and London markets Friday upon reports of subzero temperatures and blizzards in the Northeast US, including New York state and Boston.

HOUSTON, Jan. 19 -- Oil prices jumped in New York and London markets Friday upon reports of subzero temperatures and blizzards in the Northeast US, including New York state and Boston.

The New York Mercantile Exchange was closed Monday in observance of the Martin Luther King Jr. holiday.

Gas futures also rose Friday. The February natural gas futures contract advanced 9.5¢ to $5.94/Mcf Friday on NYMEX.

Stephen Smith of Stephen Smith Energy Associates of Natchez, Miss., noted that some gas demand destruction occurred in December and January.

"But this response has been tempered by the fact that oil prices are considerably higher than for the last period of significant demand destruction (May-June 2003)," Smith said, adding that, "some inter-fuel competition" is happening.

Smith forecast a Henry Hub cash price of $4.50-5.00/Mcf through the middle of April, assuming $30/bbl West Texas Intermediate crude oil and normal weather for that same period.

Other energy prices
The February contract for benchmark US sweet, light crudes gained $1.63 to $35.07/bbl on NYMEX, while the March contract gained $1.47 to $34.00/bbl. On Tuesday, the February contract for crude will expire.

On the US spot market, West Texas Intermediate at Cushing, Okla., advanced by $1.43 to $35.08/bbl Friday.

Refined products also closed higher. Heating oil for February delivery gained 5.7¢ to 98.06¢/gal Friday on NYMEX. Unleaded gasoline for the same month gained 6.23¢ to 99.52¢/gal.

In London, the February contract for North Sea Brent oil settled at $35.07/bbl, up $1.63 on the International Petroleum Exchange. Gas oil for February delivery held steady at $267.25/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes rose by $1.13 to $30.47/bbl Friday, well above the group's target of $22-28/bbl. OPEC is slated to meet in Algiers on Feb. 10.

The price of the basket for the year as of Jan. 15 has averaged $30.45/bbl. For the month of December, the basket price averaged $29.44/bbl compared with $28.45/bbl in November and $28.54/bbl in October, the OPEC Secretariat reported.