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Wintry weather drives energy prices higher
Source: Agencies |
February 9, 2010, Tuesday
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OIL and other energy prices climbed yesterday as another winter storm was expected to dump even more snow on the East Coast.
Benchmark crude for March delivery gained 70 cents to settle at US$71.89 a barrel on the New York Mercantile Exchange, rebounding from an 8 percent drop last week. In London, Brent crude gained 52 cents to settle at US$70.11 on the ICE futures exchange.
Already, parts of Virginia, Maryland, Pennsylvania and Washington are blanketed in about three feet (1 meter) of snow, knocking out power for tens of thousands of Americans and forcing government offices to close.
As those regions dig out and warm up, analysts said they expected to see sizable draws on the U.S.'s supply of natural gas and heating oil. Mid-Atlantic states are some of the biggest natural gas and heating oil consumers in the country.
Oil, heating oil and gasoline prices increased in response to the weather. But the contract for natural gas, which remains in huge surpluses in the U.S., slid nearly 2 percent. Energy experts said natural gas levels may drop in coming weeks, but there's still much more than normal for this time of year.
"When you look at the supply numbers, it's hard to get excited about natural gas," PFGBest analyst Phil Flynn said. "Unless it stays cold between now and June we're not going to have any supply problems."
The National Weather Service said yesterday that another storm could drop at least a foot (0.3 meters) of fresh powder on the beleaguered Mid-Atlantic. Forecasters said the storm will be strongest in central northern Maryland, northern Delaware, and parts of New Jersey and Pennsylvania.
Forecaster Bruce Sullivan said the agency doesn't "really see any warm weather in sight."
The Weather Service also issued storm warnings throughout much of the Midwest. Temperatures today are expected to get no higher than the 20s F (minus 5 C) across large sections of the U.S. from Montana to Maine, according to agency forecasts.
Heating oil for March delivery added 1.07 cents to settle at US$1.8855 a gallon on the New York Mercantile Exchange
If heating oil prices keep rising, utilities will eventually try to pass those costs along to consumers in higher rates. But it usually takes an extended surge in futures prices to affect home heating bills.
In other Nymex trading in March contracts, gasoline rose less than a penny to settle at US$1.894 a gallon. Natural gas gave up 11.4 cents to settle at US$5.401 per 1,000 cubic feet.
Benchmark crude for March delivery gained 70 cents to settle at US$71.89 a barrel on the New York Mercantile Exchange, rebounding from an 8 percent drop last week. In London, Brent crude gained 52 cents to settle at US$70.11 on the ICE futures exchange.
Already, parts of Virginia, Maryland, Pennsylvania and Washington are blanketed in about three feet (1 meter) of snow, knocking out power for tens of thousands of Americans and forcing government offices to close.
As those regions dig out and warm up, analysts said they expected to see sizable draws on the U.S.'s supply of natural gas and heating oil. Mid-Atlantic states are some of the biggest natural gas and heating oil consumers in the country.
Oil, heating oil and gasoline prices increased in response to the weather. But the contract for natural gas, which remains in huge surpluses in the U.S., slid nearly 2 percent. Energy experts said natural gas levels may drop in coming weeks, but there's still much more than normal for this time of year.
"When you look at the supply numbers, it's hard to get excited about natural gas," PFGBest analyst Phil Flynn said. "Unless it stays cold between now and June we're not going to have any supply problems."
The National Weather Service said yesterday that another storm could drop at least a foot (0.3 meters) of fresh powder on the beleaguered Mid-Atlantic. Forecasters said the storm will be strongest in central northern Maryland, northern Delaware, and parts of New Jersey and Pennsylvania.
Forecaster Bruce Sullivan said the agency doesn't "really see any warm weather in sight."
The Weather Service also issued storm warnings throughout much of the Midwest. Temperatures today are expected to get no higher than the 20s F (minus 5 C) across large sections of the U.S. from Montana to Maine, according to agency forecasts.
Heating oil for March delivery added 1.07 cents to settle at US$1.8855 a gallon on the New York Mercantile Exchange
If heating oil prices keep rising, utilities will eventually try to pass those costs along to consumers in higher rates. But it usually takes an extended surge in futures prices to affect home heating bills.
In other Nymex trading in March contracts, gasoline rose less than a penny to settle at US$1.894 a gallon. Natural gas gave up 11.4 cents to settle at US$5.401 per 1,000 cubic feet.
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