Market watch: Northeast cold wave boosts heating oil futures

By the OGJ Online Staff

HOUSTON, Jan. 2 -- Home heating oil futures rose Monday as a cold wave hit the largest market for that product, the Northeast US. However, oil futures prices continued to decline as traders discounted the move by the Organization of Petroleum Exporting Countries to reduce production quotas.

The January contract for home heating oil gained 0.77¢ to 55.07¢/gal in a shortened session Monday at the New York Mercantile Exchange ahead of the New Year's holiday.

Trade volumes at the NYMEX were low as many traders took Monday off. Markets in the US and London were closed Tuesday for the holiday.

The February contract for benchmark US light, sweet crudes dropped 57¢ to $19.84/bbl Monday, while the March contract was down 55¢ to $20.11/bbl. The February position continued slipping in after-hours electronic trading to $19.77/bbl.

Unleaded gasoline for January delivery plunged 2.06¢ to 56.5¢/gal in a market where price changes usually are measured by fractions of a cent. The February natural gas contract lost 2.04¢ to $2.57/Mcf.

In London, the February contract for North Sea Brent crude fell 40¢ to $19.90/bbl, and the March position was down 39¢ to $19.50/bbl on the International Petroleum Exchange. However, the February natural gas contact gained 8.2¢ to the equivalent of $4.05/Mcf on the IPE.

The average price for OPEC's benchmark basket of seven crudes dropped 39¢ to $18.58/bbl Monday.

However, that basket price averaged $18.09/bbl for all of last week, up 52¢ from the previous week. For 2001 as a whole through Thursday, the basket price averaged $23.13/bbl, down from an average $27.60/bbl in 2000.