Sam Fletcher
Senior Writer
HOUSTON, Mar. 9 -- Colder weather in the Northeast and Midwest US touched off a rally in natural gas and heating oil futures that lifted prices for all energy commodities on Mar. 8.
That could mean oil prices are headed for new highs, analysts said. "Virtually every crude oil price, with the exception of front-month West Texas Intermediate, has set new all-time highs in dollar terms over the past week and then broken those records several times," said Paul Horsnell, Barclays Capital Inc., London.
Meanwhile, the two primary unions for oil workers in Nigeria threatened a nationwide strike by mid-March unless international oil companies and government officials address a series of labor issues. There were reports that thousands of people have fled villages in southern Nigeria because of renewed fighting in that region.
In other action, the Energy Information Administration reported Mar. 9 that commercial US inventories of crude increased by 3.2 million bbl to 302.6 million bbl during the week ended Mar. 4. However, distillate fuel stocks fell by 800,000 bbl to 109.2 million bbl during the same period, with all of the loss in heating oil as diesel stocks remained level. US gasoline inventories dipped by 200,000 bbl to 224.3 million bbl.
US imports of crude increased by 34,000 b/d to 10.1 million b/d during the same period. Input of crude into US refineries was up by 43,000 b/d to more than 14.9 million b/d, with refineries operating at 89.5% of capacity. Gasoline production increased slightly, while production of distillate was up significantly, EIA reported.
Energy prices
The April natural gas contract jumped by 13.3¢ to $6.85/MMbtu Mar. 8 on the New
York Mercantile Exchange, "the highest level since late December," said analysts at Enerfax Daily. That increase was "spurred by gains in crude oil, colder weather in the Northeast, and a stronger cash [natural gas spot] market," analysts said. "The cold weather should help use some of the surplus storage gas inventory."
Heating oil for April delivery gained 3.88¢ to $1.52/gal on NYMEX. Gasoline for the same month was up by 3¢ to $1.54/gal. The April contract for benchmark US light, sweet crudes traded as high as $55.15/bbl before closing at $54.59/bbl, up by 70¢ for the day. The May position advanced by 69¢ to $55.23/bbl on Mar. 8. On the US spot market, WTI at Cushing, Okla., increased by 70¢ to $54.60/bbl.
In London, the April contract for North Sea Brent crude escalated by 75¢ to $52.84/bbl on the International Petroleum Exchange.
The average price of the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes was up by 86¢ to $49.01/bbl on Mar. 8.
Contact Sam Fletcher at [email protected]
