By OGJ editors
HOUSTON, Feb. 12 -- Energy futures prices closed mixed in trading on the New York market Wednesday as crude oil inventory reports showed an unexpected decline in US crude stocks, already at low levels, traders said.
The inventory figures renewed supply concerns. Earlier in the week, energy prices jumped after the Organization of Petroleum Exporting Countries unexpectedly decided to reduce its oil production quota by 1 million b/d to 23.5 million b/d of oil, effective Apr. 1, and to curb its overproduction of 1.5 million b/d.
The US Energy Information Administration on Wednesday reported a bigger-than-anticipated drop in oil supplies. Crude stocks fell by 2.7 million bbl, distillates by 5.9 million bbl, and gasoline by 1.2 million bbl.
However, concern about US crude inventories is somewhat eased because oil markets already are concentrating on future months when warmer temperatures reduce demand, traders noted.
Regarding natural gas in storage, the EIA estimated 1.6 tcf as of Feb. 6, a net decline of 224 bcf from the previous week. Stocks were 232 bcf higher than last year at this time and 38 bcf below the 5-year average of 1.641 tcf. Total working gas remains within the 5-year historical range.
Energy prices
The March contract for benchmark US light, sweet crudes rose by 13¢ to $34.00/bbl Wednesday on the New York Mercantile Exchange, while the April contract was up by 20¢ to $33.21/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., shot up by 20¢ to $34.08/bbl.
Gasoline for March delivery slipped by 0.23¢ to $1.0082/gal Wednesday on NYMEX. Heating oil for the same month rose by 1.33¢ to 91.13¢/gal.
The March natural gas contract dropped 14.4¢ to $5.26/Mcf Wednesday, "with a revised forecast calling for more moderate Northest weather next week driving the market below technical support to a new 10-week low," said analysts Thursday at Enerfax Daily.
"The focus was more on weather than storage," analysts said. "Despite unexpectedly large inventory draws over the last 2 weeks, relatively high storage levels have continued. But the surplus to the 5-year average has been steadily declining over the last few weeks."
In London, the March contract for North Sea Brent crude declined by 17¢ to $29.87/Mcf Wednesday on the International Petroleum Exchange. Gas oil for February delivery gained $3.75 to $257.00/tonne.
However, the March natural gas contract rose to the equivalent of $4.09/Mcf on IPE, marking an 8¢ jump but much of that increase stemmed from changes in the currency rates. The dollar plunged against several currencies Wednesday.
OPEC's average price for its seven benchmark crudes rose by 38¢ to $29.13/bbl Wednesday.
