Market watch: Energy prices slip on warmer weather, heating oil stocks

In New York Monday, energy futures prices slipped in trading on the New York Mercantile Exchange. Brokers said forecasts of much warmer weather in the key northeast consuming region of the US contributed to the fall.

Jan. 8, 2002

2 min read

By the OGJ Online Staff

HOUSTON, Jan. 8 -- In New York Monday, energy futures prices slipped in trading on the New York Mercantile Exchange.

The February contract for light, sweet crude fell 14¢ to close at $21.48/bbl, while the March contract fell 13¢ to close at $21.78. In after-hours electronic access trading, the February contract was fetching $21.40/bbl.

Refined petroleum products also ended lower, with February home heating oil losing 1.41¢ to stand at 57.19¢/gal, while unleaded gasoline for the same month pulled back by 0.50¢ to rest at 62.34¢/gal.

Brokers said forecasts of much warmer weather in the key northeast consuming region of the US, which was likely to last for around 2 weeks and reduce heating oil demand by 8-10%, were responsible for the aggressive selling and fall in New York heating oil values.

US brokers had previously ignored the fact that heating oil stocks last week were higher than year-ago levels, although they showed a significant week-on-week fall because of the cold snap that had boosted demand.

The rise in year-on-year stocks of crude and heating oil was attracting more attention now, they said, and prices were likely to slip further before stabilizing.

NYMEX natural gas for February delivery slipped by 0.3¢ to end at $2.272/Mcf.

Profit-taking was observed during the day, after the previous session's strong gains.

Analysts said traders were reluctant to take larger positions as they waited to see the effect of Organization of Petroleum Exporting Countries production cuts, which became effective Jan. 1.

Meanwhile, in London Monday, North Sea Brent crude futures slipped in line with NYMEX crude and heating oil values.

The decline dragged NYMEX crude values down and, consequently, Brent values also.

IPE February Brent futures settled Monday at $22.03/bbl, just above support at $22, and 15¢ lower than Friday's close. The day's high was $22.40 and the low $21.65.

The IPE February gas price fell 12¢ to the equivalent of $4.07/Mcf.

The price of the OPEC basket of seven crudes stood at $19.59/bbl Monday, compared with $19.64/bbl the previous Friday.