Posted on 12/09/2005 4:30:15 AM PST by Flavius
SINGAPORE (AP) -- Natural gas prices rose to a new record Friday as a winter storm hit the northern United States, while crude and heating oil prices also gained amid expectations for strong demand.
Natural gas for January on the New York Mercantile Exchange reached a new intraday high of $15.52 per 1,000 cubic feet in Asian trading before slipping back to $15.351 per 1,000 cubic feet, up nearly 36 cents. The contract had closed at $14.994 overnight, also a new record.
ADVERTISEMENT Nymex crude was also higher. Light, sweet crude oil for January delivery surged 58 cents to $61.24 a barrel in midday electronic trading in Europe.
Although more than $9 lower than its all-time high of $70.85 a barrel set Sept. 30, oil prices are more than 40 percent higher than a year ago.
On London's ICE Futures, January Brent was up 46 cents at $59.13 a barrel.
"The price rise is all based on forecasts of cold weather to hit large portions of the United States," said Victor Shum, a Singapore-based analyst at energy consultants Purvin & Gertz. "The weather affects natural gas, but the (trading) psychology also affects the oil market."
In other Nymex trading, heating oil was up by more than 2 cents to $1.8041 a gallon, and gasoline rose just a bit more to $1.6500 a gallon.
Forecasters AccuWeather said a winter storm will dump a "substantial amount" of snow along the northeastern corridor of the United States, which consumes around 80 percent of total heating oil used in the U.S., the world's largest energy user.
On Wednesday in the United States, bitterly cold air poured southward across the midsection of the country, sending temperatures to record lows from Montana to Illinois. The mercury dived to a record minus-43 Celsius (minus-45 F) at West Yellowstone, Montana.
The U.S. Energy Department recently predicted that households heating primarily with natural gas can expect to spend about 50 percent more this winter.
With several more months of wintry conditions expected, analysts also predicted the early jump in prices could provide a higher base.
"Winter has a long way to go," said Shum. "The market psychology supports a rather high price. This is only December, the anticipation of the continuation of colder weather will provide a high price floor."
The Organization of Petroleum Exporting Countries meets Monday in Kuwait, where it will dictate its pricing policy for the new year. Most analysts are not expecting OPEC to cut output when it meets. Typically, the organization considers cutting output when stocks start building and prices fall.
Venezuela, one of the cartel's more hawkish members, said it would defend the price of its oil, but did not specify what level it would be comfortable with.
"We will propose all of the measures necessary to defend the price of our oil. As a producing nation we believe that oil has a just price," said Venezuelan oil minister Rafael Ramirez.
The sad thing is we're being gouged by our own. We're not having to pay more overseas. Every winter, the oil and gas to heat home suddenly skyrockets at the first cold front. Gasoline prices jump at the least little msm gloom and doom and holiday weekends never mind those barrels were bought months earlier.
Walter Williams had a fine article about it a few days ago. A little research....suddenly... enlightenment!
It is a long way from 'sitting on a reservoir' and getting it past the pilot light.
Reserves deplete (generaly) by about 7% each year, unless that production is replaced, and there has been a huge row over coalbed methane, which was taking up a lot of the slack.
No one is sandbagging at these prices, and drilling is going along as fast as it can.
Expect the price to come down by next winter.
"WHY NATURAL GAS"? The U.S. is sitting on one of the largest reservoirs of Natural Gas in the world.
It still has to be refined.
S & D economics.
I have my thermostat set on 62. And I wear a sweater in the house. The house is new and well sealed but I still fixed a little more weather seal around the windows and doors. I expect my gas bill to be $450 per month by Feburary. From what I hear that is a fairly low estimate.
But $450? To freeze in my modest 1500sq.ft. home? Crazy.
Why is this article from Singapore?
I believe you. When I left Western NY about 6 years ago...my monthly gas bill (basic budget) was for $285.00.....one reason I'm here in FLorida.
You are guessing. What is your most recent bill?
gives foreign investors the chance to go long and jack up prices when the going is good
aka when its cold you could have made ton of loot on this recent run up, and down as well,
i dont know the whole setup , but since there is asian trading... it means they trade in asia i suspect
What I mean is, I am budgeting that much. Last year my highest bill was $260 for Feburary.
My recent (read/not estimated) bill for November when it wasn't even that cold and I didn't turn on the furnace until 11/23 was......$557.00!!!
We have ALL new windows, an energy-efficient furnace, a new front storm door, a new garage door and new door from garage into the house.
Admittedly, it's a larger home, but $557.00???!!! Can't even begin to imagine what it's going to be for December and January!
$557??????
Man, I feel for you this winter. I might be wise for you to use kerosene or electric space heaters.
Hunker down and get an extra blanket
I spoke to Nicor Gas yesterday for over 1/2 hour because I just KNEW it must be wrong...but alas...that was not to be. They suggest I go on the "budget plan" for "only" $420.00 a month which is a flat fee for every month (for a year I presume). I'm not completely comfortable with that either because their goal is to build up a credit (while they are using my money!!).
I've got the thermostat set at 67 so it's not like we're walking around here in summer clothes. I honestly hope this kind of bill isn't widespread because I don't know how people are going to keep up with this.
"The U.S. Energy Department recently predicted that households heating primarily with natural gas can expect to spend about 50 percent more this winter."
This quote from the article is most alarming, but would appear to be correct if my bill is any indication.
Natural gas doen't need refining.
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