Sam Fletcher
Senior Writer
HOUSTON, Feb. 27 -- Energy futures prices were mixed Thursday, with the near-month natural gas contract posting its second consecutive increase in as many sessions on the New York Mercantile Exchange after hitting a 3-month low Tuesday.
Those price hikes came after the US Energy Information Administration reported early Thursday the withdrawal of 164 bcf of natural gas from US underground storage during the week ended Feb. 20, well above the previous consensus of Wall Street analysts (OGJ Online, Feb. 26, 2004). Officials said it represented a record withdrawal for that time of year.
"Assuming 164 bcf is not a 'lumpy' figure, the higher-than-expected withdrawal could be the result of lagged incremental demand, post the ongoing decline in cash prices (and anticipated further decline in March bid-week prices from $5.76[/Mcf] in February and $6.16[/Mcf] in January). The high pull may also reflect storage capacity holders cycling inventories for the pending refill season due to contractual agreements," said UBS Securities LLC analyst Ronald J. Barone of New York.
Energy prices
The April natural gas contract increased by 17¢ to $5.39/Mcf Thursday on NYMEX, as surprised traders scrambled to cover open sales positions in the wake of the bullish gas storage report, said analysts Friday at Enerfax Daily. "While above-average storage draws over the last 7 weeks have turned the summer outlook more supportive, ample levels now and the approach of spring are likely to limit the upside in prices near-term," they said.
In the wake of an earlier EIA report that US gasoline inventories dropped by 1.6 million bbl to 203.4 million bbl during the week ended Feb. 20, gasoline for March delivery continued to climb Thursday, up by 1.84¢ to $1.0773/gal. Heating oil for the same month gained 0.93¢ to 94.32¢/gal. With the March contracts scheduled to expire Friday, traders also were forced to cover open sales positions during Thursday's session.
Crude prices were mixed Thursday. The April contract for benchmark US light, sweet crudes lost 17¢ to $35.51/bbl Thursday on NYMEX, but the May position gained 22¢ to $34.55/bbl. On the US spot market, however, West Texas Intermediate at Cushing, Okla., plunged by $1.65 to $35.53/bbl.
In London, the April contract for North Sea Brent crude closed unchanged at $31.57/bbl Thursday after trading at $31.30-32/bbl on the International Petroleum Exchange. Gas oil for March delivery gained $2.25 to $270.75/tonne. The March natural gas contract inched up by 0.37¢ to the equivalent of $4.08/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes increased by 11¢ to $31/bbl Thursday.
Contact Sam Fletcher at [email protected]
