Sam Fletcher
Senior Writer
HOUSTON, Jan.10 -- Amid forecasts of continued mild weather, natural gas futures prices fell Jan. 9, wiping out a rebound in the previous trading session on the New York market.
There has been increased volatility in the energy market—particularly natural gas—as weather continues to be the primary driver. "Front-month gas futures slipped from the $13-14[/MMbtu] range at the beginning of December to the $11-12 range by the end of the month, as concerns over colder-than-normal weather subsided," said J. Marshall Adkins in the Houston office of Raymond James & Associates Inc. However, Adkins said, "Gas prices remained well above 6:1 parity with oil."
The February natural gas contract closed at $9.63/MMbtu Jan. 6 in New York, up from its lowest price level since August in its first increase in a week (OGJ Online, Jan. 9, 2006). On Jan. 9, however, it fell to $9.36/MMbtu on the New York Mercantile Exchange, down by 27.2¢ for the day after trading as low as $9.15/MMbtu during the session, the lowest level since July 29.
With mild weather forecast for much of the US, demand for heating fuels is expected to be a third below normal, said analysts at Enerfax Daily.
Meanwhile, the US Minerals Management Service said Jan. 9 that 100 production platforms on federal leases in the Gulf of Mexico are still listed as evacuated in the wake of hurricanes last summer. The amount of production from federal leases that is still shut in is 402,259 b/d, or 26.8% of the crude, and 1.9 bcfd, or 18.6%, of the natural gas from those waters. Cumulative production lost since Aug. 26 totaled 113.2 million bbl of crude and 581.7 bcf of natural gas. That is equivalent to 20.7% of the oil and 15.9% of the natural gas produced annually from federal leases in the Gulf of Mexico.
Other energy prices
The February contract for benchmark US sweet, light crudes lost 71¢ to $63.50/bbl Jan. 9 on NYMEX, while the March contract was down by 62¢ to $64.35/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., fell by 71¢ to $63.51/bbl. Gasoline for February delivery dropped 4.78¢ to $1.77/gal. Heating oil for the same month declined by 3.29¢, also to $1.77/gal. In London, the February contract for North Sea Brent crude fell by 71¢ to $62.01/bbl on the International Petroleum Exchange. Gas oil for January lost $9.50 to $529.25/tonne.
The secretariat of the Organization of Petroleum Exporting Countries in Vienna was closed Jan. 10, so no price was available for the group's basket of 11 benchmark crudes.
Contact Sam Fletcher at [email protected].
