By OGJ editors
HOUSTON, Nov. 19 -- Heating oil futures prices for all winter months continued to climb Thursday, with predictions of a colder-than-normal winter in the eastern US, but other energy commodities resumed their downward slide.
Expectations among ministers of the Organization of Petroleum Exporting Countries of a build in crude inventories through the fourth quarter, followed by a likely decline next year in demand growth for petroleum, contributed to the bearish market, said analysts.
Meanwhile, Russian President Vladimir Putin reiterated that Russia is ready to cooperate with OPEC in reduce crude prices. OPEC's board of governors met Thursday to discuss possibly raising the group's target price band. The average price for OPEC's basket of seven benchmark crudes has remained above the current target of $22-28/bbl since Dec. 2, 2003. It increased by 71¢ to $36.20/bbl Thursday.
Other energy prices
Heating oil for December delivery gained 1.86¢ to $1.43/gal Thursday on the New York Mercantile Exchange. All other heating oil contracts through May advanced by smaller amounts in that market. However, December gasoline fell by 1.77¢ to $1.24/gal, while the December natural gas contract plunged by 41¢ to $6.87/Mcf, "pressured first by a soft cash [spot] market and mild weather this week, then later by a slightly bearish weekly inventory report," said analysts Friday at Enerfax Daily.
"Beyond the return of mild conditions this week, overall heating demand should improve heading into December," said Ronald J. Barone, UBS Securities LLC, New York. "According to the National Weather Service's latest 6-10 day outlook, temperatures across much of the country are expected to average normal to below-normal, while conditions in the Northwest and Florida should average above normal," he reported Thursday.
The US Minerals Management Service said Thursday that 678.47 MMcfd of natural gas and 196,222 b/d of crude remain were still shut in as a result of damage from Hurricane Ivan that hit the central Gulf of Mexico in mid-September. Offshore production totaling of some 122.3 bcf of natural gas and 30.5 million bbl of crude has been lost since Sept. 11, MMS officials said.
The December contract for benchmark US light, sweet crudes lost 62¢ to $46.22/bbl Thursday on NYMEX, while the January contract fell by 74¢ to $46.38/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by 62¢ to $46.23/bbl.
In London, the January contract for North Sea Brent crude slipped by 4¢ to $42.72/bbl on the International Petroleum Exchange.