- (AP) -- Oil and natural gas prices climbed to their highest
levels in more than nine months Friday as traders responded to colder weather
in the Northeast, tight supplies and rising demand.
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- The weak dollar is also pushing energy prices higher,
analysts said.
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- "It gives OPEC countries less buying power and literally
no incentive to make any increases in output," of crude, which is
denominated in dollars, said Tom Bentz, an analyst at BNP Paribas Commodity
Futures in New York.
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- Crude oil for February delivery closed up 33 cents to
$34.31 on the New York Mercantile Exchange - the first time the front-month
contract has closed above $34 since March 17, just a few days before the
invasion of Iraq.
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- "The weather made people realize just how tight
supplies are," said Phil Flynn, an analyst at Alaron Trading Corp.
in Chicago.
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- The nation's commercially available inventory of crude
is 3 percent below last year's levels. For the week ending Jan. 2, commercial
supplies stood at 269.0 million barrels, down from 277.5 million barrels
a year earlier.
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- Commercial inventories of natural gas, meanwhile, stood
at 2.6 trillion cubic feet for the week ended Jan. 2, or 8 percent above
the five-year average for this time of year.
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- Flynn said the five-year average was a misleading metric,
since demand for natural gas has been rising.
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- But Bentz said supplies of natural gas are adequate.
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- Indeed, many analysts said they were surprised when prices
first began to rise quickly in late November, and that they remain hard-pressed
to substantiate these levels.
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- Natural gas for February delivery rose 19.3 cents to
$7.287 per 1,000 cubic feet on Friday.
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- "I personally don't believe we should be up at these
levels," Bentz said, noting that traders have ignored recent fuel-inventory
reports that were bearish and focused instead on bullish factors such as
the cold weather and the weak dollar.
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- "When it's cold, the market does tend to have an
upward bias," he said.
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- Because some users of natural gas can switch to fuels
derived from oil when prices are high, price trends for one can affect
the other.
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- In other Nymex trading, heating oil futures finished
up 2.55 cents at $1.01 per gallon and unleaded gasoline closed at $1.02
per gallon, up 2.69 cents.
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- In London, Brent crude from the North Sea rose 29 cents
to $31.37 per barrel.
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- © 2003 Daily Hampshire Gazette
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- http://www.gazettenet.com/story.cfm?id_no=1100094
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