Sam Fletcher
Senior Writer
HOUSTON, Jan. 10 -- Energy futures prices pulled back slightly in light, volatile trading Jan. 7 on the New York Mercantile Exchange, yet ended the week at higher levels than they started.
"It was another roller-coaster week for oil prices, which started out with a sharp decline after new weather forecasts on [Jan. 3] called for above-normal temperatures east of the Mississippi through mid-January," said Robert S. Morris, Banc of America Securities LLC, New York. "Oil prices then rebounded after Saudi Arabia announced that it has enforced its pledge to cut production by 500,000 b/d in accordance with [the Organization of Petroleum Exporting Countries'] agreement to reduce output by 1 million b/d beginning this month.
"The momentum then reversed after a bearish US crude-plus-product inventory report was released at mid-week. Oil prices subsequently surged, though, on technical factors, comments by some OPEC members that the organization might decide to reduce production further when the organization meets at the end of this month, and anxiety over the escalating violence in Iraq as the Jan. 30 elections approach," Morris said. Energy prices generally are expected to remain volatile and to be affected by the situation in Iraq and by subsequent statements by OPEC ministers through their Jan. 30 meeting.
Energy prices
The February contract for benchmark US light, sweet crudes lost 13¢ to $45.43/bbl Jan. 7 on NYMEX, after topping $46/bb in interday trading for the first time in more than 2 weeks. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by the same amount to $45.44/bbl. Heating oil for February delivery dipped by 0.8¢ to $1.27/bal on NYMEX. Gasoline for the same month slipped by 0.87¢ to $1.2182/gal. The February natural gas contract fell by 4.8¢ to $6/MMbtu "ahead of a mild weekend, despite colder weather forecasts for late this week," said analysts on Jan. 10 at Energy Daily.
"Some private weather forecasts are calling fro temperatures in the Northeast to be above normal through mid-week before turning seasonal late in the week. Midwest temperatures are also expected to average above normal early this week, slipping to below normal late in the week. Other private forecasters are calling for arctic weather to drop down from Canada to the Midwest and Northeast by this weekend," the analysts said.
In London, the February contract for North Sea Brent crude increased by 33¢ to $43.18/bbl Jan. 7 on the International Petroleum Exchange.
The average price for OPEC's basket of seven benchmark crudes jumped by $1.16 to $39.35/bbl Jan. 7. For the week as a whole, however, OPEC's basket price averaged $36.90/bbl up by $1.18 from the previous week.
Contact Sam Fletcher at [email protected]
