MARKET WATCHEnergy futures prices climb

Energy futures prices climbed higher Feb. 16 primarily in technical trading as traders covered positions ahead of the long US holiday weekend with the New York Mercantile Exchange closed Feb. 19 for Presidents Day.

Sam Fletcher
Senior Writer

HOUSTON, Feb. 19 -- Energy futures prices climbed higher Feb. 16 primarily in technical trading as traders covered positions ahead of the long US holiday weekend with the New York Mercantile Exchange closed Feb. 19 for Presidents Day.

"The market has found a comfort zone in the $55-60/bbl trading range," said analysts with the Société Générale Group. The Organization of Petroleum Exporting Countries should remain quiet as long as benchmark US crudes trades near $60/bbl, they said.

Since winter generally has been "a nonevent" this year, the petroleum market is "already switching to transportation fuels," SGG said. Atlantic Basin inventories are looking less and less bearish. "Refining margins are on their historical high on a worldwide basis for this time of the year. Geopolitics [are] so calm that the risk is definitely on the upside," SGG analysts said. "Another (short) trading week in the $56-60/bbl range is highly likely."

Analysts at the Houston office of Raymond James & Associates Inc. reported, "The advent of warm weather is likely to entice the feeling that the winter season is drawing to a close and demand for heating oil and distillates should start to dwindle. It is still too early to reach such a deduction given the unpredictable nature of weather patterns."

Energy prices
The March contract for benchmark US light, sweet crudes gained $1.40 to $59.39/bbl Feb. 16 on NYMEX. The April contract increased by $1.35 to $59.86/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by $1.41 to $59.41/bbl. Heating oil for March delivery increased by 4.63¢ to $1.67/gal. The March contract for reformulated blend stock for oxygenate blending (RBOB) gained 4.81¢ to $1.65/gal.

The March natural gas contract increased by 21.1¢ to $7.50/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, Okla., lost 21.5¢ to $8.65/MMbtu.

In London, the April IPE contract for North Sea Brent crude climbed by $1.35 to $58.95/bbl. The March gas oil contract increased by $10.75 to $512/tonne.

The average price for OPEC's basket of 11 benchmark crudes rose by 76¢ to $53.56/bbl on Feb. 16. So far this year, OPEC's basket price has averaged $51.83/bbl, up from an average $61.08/bbl for all of 2006.

Contact Sam Fletcher at samf@ogjonline.com.

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