By OGJ editors
HOUSTON, Mar. 1 -- Crude oil and heating oil prices rose in trading on the New York Mercantile Exchange on Feb. 28 amid late-season cold in key markets.
For 2 weeks, cold weather in the US and Europe has boosted heating fuel demand. The US Energy Information Administration is slated to release its weekly inventory report on Mar. 2. Heating oil stocks are 7% below levels for this time last year, analysts have noted.
Meanwhile, the Organization of Petroleum Exporting Countries' acting secretary-general said OPEC would refrain from cutting production quotas at its next meeting if the price continues to rise.
"We do not like to see prices escalate too suddenly. We won't consider cutting output if oil prices continue to climb above $50/bbl," Adnan Shihab-Eldin told Dow Jones Newswires on Mar. 1.
Shihab-Eldin said he believes high oil prices will prove to be temporary. OPEC oil ministers are scheduled to meet on Mar. 16 in Iran.
In other news, Lehman Bros. raised its 2005 futures oil and gas price assumptions to $45/bbl for West Texas Intermediate oil and $6/Mcf. Its 2006 forecast assumes $40/bbl oil and $5.75/Mcf gas.
"We believe excess oil production capacity will remain limited within OPEC, and adding new capacity will take time. Additional oil is not coming from non-OPEC sources either. Tight oil production capacity is the key factor to a longer cycle," a Lehman research note said.
Energy prices
The April contract for benchmark US light, sweet crudes increased by 26¢ Feb. 28 on the NYMEX to $51.75/bbl. During the trading session, the April contract briefly peaked at $52.28/bbl before settling lower. The May contract closed up by 38¢ at $52.33/bbl.
The spot price of West Texas Intermediate at Cushing, Okla., gained 81¢ to $51.76/bbl. NYMEX gasoline for March delivery lost 0.89¢ to $1.2456/gal. The March heating oil contract was up by 3.73¢ at $1.49/gal.
The April natural gas contract jumped by 1.5¢ to $6.73/MMbtu on NYMEX.
Natural gas for next day delivery at the Henry Hub on Feb. 28 gained 37¢ to $6.64/MMbtu.
In London, the April contract for North Sea Brent crude increased by 45¢ to $50.06/bbl on the International Petroleum Exchange.
The average price for OPEC's basket of seven benchmark crudes was up by 77¢ at $46.26/bbl on Feb. 25.
