Energy futures down on warm US weather, high inventory

By the OGJ Online Staff

HOUSTON, Jan. 10 -- In New York Wednesday, energy futures prices weakened considerably in trading on the New York Mercantile Exchange.

The February contract for light, sweet crude lost $1.07 to close at $20.18/bbl, while the March contract stood at $20.65, down 92¢. In after-hours electronic access trading, the February contract brought $20.27/bbl, while the March contract stood at $20.70, both up from the NYMEX close.

Refined petroleum products also closed lower, with February home heating oil giving back 3.03¢ to finish at 53.79¢/gal, while unleaded gasoline for the same month plunged by 2.93¢ to end at 58.06¢.

NYMEX natural gas for February delivery pulled back by 5.3¢ to stand at $2.228/Mcf.

Trading reflected the bearish sentiment of domestic inventory reports. API's Tuesday stocks report said distillate inventories increased by 5.68 million bbl last week. Crude and gasoline stocks increased by 115,000 bbl and 798,000 bbl, respectively, during the same period.

Meanwhile, in London Wednesday, North Sea Brent crude oil futures also plunged on the International Petroleum Exchange, in line with the lower NYMEX values.

Rising US stocks, coupled with forecasts of much warmer weather across many key consuming areas of the US, combined to push prices downwards, brokers said.

Sentiment had turned bearish enough for follow-through selling to take prices down to support at around $20.50/bbl for Brent, they said, adding that the NYMEX would probably take the lead in trading, as it had done in recent days.

On Wednesday, IPE February Brent settled at $20.89/bbl, down by $1.13 from the previous close. The day's high was $21.55 and the low $20.85. Also, the February contract for natural gas fell 11¢ to the equivalent of $3.94/Mcf.

The Organization of Petroleum Exporting Countries' basket of seven crudes stood at $18.77/bbl Wednesday, compared with $19.47 the previous day.