Sam Fletcher
Senior Writer
HOUSTON, Mar. 4 -- Gasoline futures prices continued to explore new highs Mar. 3 on the New York Mercantile Exchange, again pulling up crude prices in the process.
Meanwhile, Banc of America Securities, New York, became the latest investment banker to increase its 2005 price forecast for crude while reducing its predicted price for natural gas this year.
Banc of America hiked its projected 2005 spot market price for West Texas Intermediate to $45/bbl from $42/bbl previously. It raised other WTI spot market price predictions to $38/bbl in 2006, from $32/bbl previously; and to $35/bbl from $32/bbl for 2007 and beyond. "The fundamentals certainly appear to be 'stretched' in supporting the current oil price, but we believe [the Organization of Petroleum Exporting Countries] remains intent on keeping the WTI spot equivalent price above $40/bbl, which appears defendable, in our opinion, apart from an unanticipated slowdown in the global economy," said analyst Robert S. Morris.
Because of warmer-than-normal US winter weather, however, Banc of America reduced its forecast composite spot natural gas market price to $6/MMbtu from $6.50/MMbtu previously. "However, we are increasing our '06 composite spot natural gas price forecast to $6.25/MMbtu from $5.35/MMbtu and for '07 and beyond to $5.85/MMbtu from $5.35/MMbtu," Morris said. "Our current projection is that domestic natural gas storage levels will exit March at 1.3 tcf, or perhaps slightly higher, and will be refilled to 3.3 tcf by the start of next winter, or the same as last year, although the variable with the greatest effect on our projections is the weather from here forward."
Energy prices
Gasoline for April delivery bumped up by 2.37¢ to a new high closing of $1.51/gal, surpassing its previous record set Mar. 2 on NYMEX. However, heating oil for the same month dropped by 1.77¢ to $1.49/gal. The April natural gas contract lost 6¢ to $6.66/MMbtu on NYMEX, having peaked early in the session at $6.80/MMbtu before dipping lower until late morning when it again headed higher before bottoming out at $6.64/MMbtu, said analysts at Enerfax Daily
"The market traded lower after a slightly bearish weekly inventory report was released," the analysts said. The Energy Information Administration the Energy Information Administration reported 107 bcf of gas was withdrawn from US underground storage during the week ended Feb. 25. That compared with withdrawals of 88 bcf the previous week and 96 bcf a year ago. US gas storage now stands at 1.6 tcf, up by 415 bcf from a year ago and 358 bcf above the 5-year average (OGJ Online, Mar. 2, 2005).
The April contract for benchmark US light, sweet crudes closed at $53.57/bbl, up by 52¢ for the day on NYMEX, after trading as high as $55.20/bbl during that session. The May contract gained 54¢ to $54.16/bbl. On the US spot market, WTI at Cushing, Okla., increased by 52¢ to $53.58/bbl.
In London, the April contract for North Sea Brent crude increased by 73¢ to $51.95/bbl on the International Petroleum Exchange.
The average price for OPEC's basket of seven benchmark crudes jumped by $1.35 to $48.36/bbl on Mar. 3.
Contact Sam Fletcher at [email protected]
