Market watch: Warm weather dampens energy futures prices

By the OGJ Online Staff

HOUSTON, Jan. 9 -- Energy futures prices continued to decline in international markets Tuesday, with predictions of 2 weeks of warmer weather in the northeastern US, the largest market for home heating oil.

Analysts said that run of warm weather could reduce demand for heating oil by 8%-10%.

The February contract for benchmark US sweet, light crudes lost 23¢ to $21.25/bbl Tuesday on the New York Mercantile Exchange. The March contract also was down 21¢ to $21.57/bbl. Both positions continued to slip to $20.78/bbl and $21.12/bbl, respectively, in after-hours electronic trading.

Unleaded gasoline for February delivery dropped 1.35¢ to 60.99¢/gal during regular trading Tuesday on the NYMEX. Home heating oil for the same month dipped 0.37¢ to 56.82¢/gal. However, the February contract for natural gas edged up 0.9¢ to $2.28/Mcf.

After the close of regular trade on the NYMEX, the American Petroleum Institute reported Tuesday that US inventories of distillate fuel, including home heating oil, increased by 5.7 million bbl to 144.8 million total last week.

US gasoline stocks also were up 798,000 bbl to more than 207 million bbl during the same period, while crude inventories increased 115,000 bbl to more than 310 million bbl.

In London, brokers reported little change for North Sea Brent oil in quite trading Tuesday on the International Petroleum Exchange. Futures prices recovered in later trading from an earlier dip, but it would take some bullish development to push Brent prices much above $22/bbl, they said.

The February Brent contract closed at $22.02/bbl Tuesday, down 1¢ for the day after trading in a range of $21.94-$22.15/bbl on the IPE.

The February natural gas contract also lost 2.5¢ to the equivalent of $4.05/Mcf on the IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes dropped 12¢ to $19.47/bbl.