MARKET WATCHEnergy futures prices dip for second day on mild winter forecasts

Energy futures prices generally dipped in trading on the New York Mercantile exchange Tuesday while traders remained focused on weather forecasts, most of which call for a normal winter across the US.

Oct. 29, 2003

2 min read

By OGJ editors
HOUSTON, Oct. 29 -- Energy futures prices generally dipped in trading on the New York Mercantile exchange Tuesday while traders remained focused on weather forecasts, most of which call for a normal or slightly below normal winter across the US.

In particular, warm weather in the Northeast contributed to a decline in both natural gas and heating oil prices. Analysts said that trend pulled crude oil prices lower as well.

The NYMEX natural gas price for November declined 2.6¢ to $4.49.Mcf. On Monday, gas prices had plunged by 27.4¢ to $4.51/Mcf.

"A flattening cash market and fairly mild weather forecasts this week pressured November ahead of its expiration today," said analysts Wednesday at Enerfax Daily. "There is no reason to turn on the furnances right now, so cash is weak."

Traders also are flattening their positions based upon uncertainly about planned revisions in the weekly Energy Information Administration storage report to be released Thursday. Revised storage figures will be released for each week since July 5.

"Although forecasts are still looking for a normal or slightly below normal winter, private forecasters are predicting an above average November," Enerfax Daily analysts said.

Refinery reports
Amerada Hess Corp. Tuesday said mechanical problems had caused gasoline production at the 450,000 b/d Hovensa LLC refinery to be cut by 33%. Hovensa, a joint venture on the Virgin Islands, is owned by Amerada Hess and Venezuela's state oil company, Petróleos de Venezuela SA.
In other refinery-related news, Dow Jones Newswires reported sources as saying that Marathon Ashland Petroleum LLC shut a 192,000 b/d crude unit over the weekend for a week of unplanned maintenance. No additional details were immediately available from MAP.
Energy prices
The December contract for benchmark US light, sweet crudes fell by 36¢ to $29.56/bbl Tuesday on NYMEX, while the January contract lost 33¢ to $29.37/bbl. On the US spot market, West Texas Intermediate oil at Cushing, Okla., slipped by 20¢ to $29.83/bbl.

Heating oil for November delivery dropped 0.89¢ to 79.97¢/gal on NYMEX. Unleaded gasoline for the same month added 0.17¢ to 83.01¢/gal.

On IPE, the December contract for North Sea Brent oil lost 35¢ to $28.04/bbl Tuesday. The November gas oil contract declined by $4.25 to $248.50/tonne.

The November natural gas contract surged forward by 50¢ to the equivalent of $5.70/Mcf Tuesday on IPE,

The average price for OPEC's basket of seven benchmark crudes lost 35¢ to $27.77/bbl Tuesday.