Related News
Another winter blast helps boost energy prices
Source: Agencies |
February 10, 2010, Wednesday
|
Online Edition
Online Edition
OIL and heating oil prices got a boost yesterday as the second powerful storm in four days threatened to dump more than a foot (0.3 meters) of snow on the East Coast. A weakening dollar was also a factor.
Crude oil prices moved higher for the second straight day, in part because of the weather. Benchmark crude for March delivery jumped US$1.86 to settle at US$73.75 a barrel.
In London, Brent crude gained US$2.02 to settle at US$72.13 on the ICE futures exchange.
Traders often buy commodities such as oil as a hedge against inflation and a weaker dollar and sell them when the U.S. currency rises. Oil, which is priced in dollars, become less expensive in other currencies when the greenback weakens.
The euro bought US$1.3775 in late New York trading, up from US$1.3671 late Monday.
The storm was expected to drop about as much snow in parts of the Midwest before making its way to the big heating-oil consuming states in the Mid-Atlantic and New York by yesterday afternoon and evening. As much as 20 inches (50 centimeters) of snow are expected in Washington, 18 inches (45 centimeters) for Philadelphia and maybe a foot (30 centimeters) or more in New York City.
Parts of the Mid-Atlantic region were buried with nearly three feet (1 meter) of snow over the weekend.
Coupled with forecasts for colder-than-normal temperatures through at least mid-February, demand for heating oil will continue to be as strong as it has been for much of the winter.
Wholesale heating oil prices rose 5.18 cents to settle at US$1.9373 per gallon on the New York Mercantile Exchange yesterday.
Eventually, that jump in prices could result in higher retail prices as people in the Northeast, who consume 80 percent of the heating oil used in the U.S., likely will need to fill up their tanks one more time before spring arrives.
Still, some analysts were surprised that prices did not move even higher.
"Given the strong weather, implied demand and lack of refining capacity, you would think heating oil would be stronger at this point," oil analyst and trader Stephen Schork said.
U.S. refiners have been cutting production along the East Coast for months because of continued soft demand for energy.
The national average for retail heating oil prices was US$2.867 per gallon last week, nearly 50 cents higher than a year ago, according to the Energy Information Administration.
But heating oil's influence on energy markets has been waning for years. The number of U.S. homes heated with oil has dropped to 7 percent in 2008 from 32 percent in 1960. Consumption of heating oil for residential customers is about half of what it was 20 years ago, according to EIA records.
More Americans are switching to natural gas, but even there prices have remained steady despite heavy demand. Natural gas prices fell 4.5 cents per 1,000 cubic feet to US$5.356 on the Nymex.
Huge amounts of gas in storage, strong production and imports have helped keep prices stable, said Chris McGill of the American Gas Association. "The supply picture has been pretty robust," he said.
In other Nymex trading in March contracts, gasoline added 3.5 cents at settle at US$1.9290 a gallon.
Crude oil prices moved higher for the second straight day, in part because of the weather. Benchmark crude for March delivery jumped US$1.86 to settle at US$73.75 a barrel.
In London, Brent crude gained US$2.02 to settle at US$72.13 on the ICE futures exchange.
Traders often buy commodities such as oil as a hedge against inflation and a weaker dollar and sell them when the U.S. currency rises. Oil, which is priced in dollars, become less expensive in other currencies when the greenback weakens.
The euro bought US$1.3775 in late New York trading, up from US$1.3671 late Monday.
The storm was expected to drop about as much snow in parts of the Midwest before making its way to the big heating-oil consuming states in the Mid-Atlantic and New York by yesterday afternoon and evening. As much as 20 inches (50 centimeters) of snow are expected in Washington, 18 inches (45 centimeters) for Philadelphia and maybe a foot (30 centimeters) or more in New York City.
Parts of the Mid-Atlantic region were buried with nearly three feet (1 meter) of snow over the weekend.
Coupled with forecasts for colder-than-normal temperatures through at least mid-February, demand for heating oil will continue to be as strong as it has been for much of the winter.
Wholesale heating oil prices rose 5.18 cents to settle at US$1.9373 per gallon on the New York Mercantile Exchange yesterday.
Eventually, that jump in prices could result in higher retail prices as people in the Northeast, who consume 80 percent of the heating oil used in the U.S., likely will need to fill up their tanks one more time before spring arrives.
Still, some analysts were surprised that prices did not move even higher.
"Given the strong weather, implied demand and lack of refining capacity, you would think heating oil would be stronger at this point," oil analyst and trader Stephen Schork said.
U.S. refiners have been cutting production along the East Coast for months because of continued soft demand for energy.
The national average for retail heating oil prices was US$2.867 per gallon last week, nearly 50 cents higher than a year ago, according to the Energy Information Administration.
But heating oil's influence on energy markets has been waning for years. The number of U.S. homes heated with oil has dropped to 7 percent in 2008 from 32 percent in 1960. Consumption of heating oil for residential customers is about half of what it was 20 years ago, according to EIA records.
More Americans are switching to natural gas, but even there prices have remained steady despite heavy demand. Natural gas prices fell 4.5 cents per 1,000 cubic feet to US$5.356 on the Nymex.
Huge amounts of gas in storage, strong production and imports have helped keep prices stable, said Chris McGill of the American Gas Association. "The supply picture has been pretty robust," he said.
In other Nymex trading in March contracts, gasoline added 3.5 cents at settle at US$1.9290 a gallon.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
