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Oil Prices Flat in New York, Natural Gas Hits Fresh High

Posted on: Wednesday, 14 December 2005, 09:00 CST

Oil prices flat in New York, natural gas hits fresh high

NEW YORK, Dec. 13 (Xinhua) -- Oil prices stabilized Tuesday but natural gas hit a new high as cold weather in the United States and ongoing disrupted production in the Gulf of Mexico caused traders to worry that supplies of home-heating fuels will be tight this winter.

Nymex natural gas for January rose as high as 15.78 dollars per 1,000 cubic feet then settled at 15.378 dollars, up 53.7 cents from Monday's settlement. The previous record close was 14.994 dollars on Dec. 8.

New York's main oil contract, light sweet crude for delivery in January, added a slender seven cents to close at 61.37 dollars a barrel.

In London, the price of Brent North Sea crude for January delivery climbed eight cents to finish trade at 59.52 dollars a barrel.

By Wednesday, a storm will bring snow to the upper Midwest of the United States, while an ice storm will move up the east coast by Thursday, according to Accuweather forecasters. December has been colder than usual so far, and many forecasters are saying below- average temperatures will persist throughout the winter.

Natural gas is most commonly used to heat homes in the Midwestern US states, while heating oil is most commonly used in the Northeast.

Nymex heating oil gained 6.4 cents to settle at 1.8365 dollars a gallon Tuesday, while gasoline settled marginally lower at 1. 6459 dollars a gallon.

The Paris-based IEA forecast that world oil demand in 2006 would increase by 1.79 million barrels a day, a 2.2 percent increase on the year. The bulk of the increase is expected in the second half of the year, with the United States showing the sharpest increases, the IEA said.

Meanwhile, the U.S. Energy Department on Monday discarded earlier predictions that oil prices would drop to around 30 dollars a barrel, saying costs will persist near or above 50 dollars a barrel for years and force a shift to more fuel- efficient cars and alternative fuels.

But the department's forecast was more positive on natural-gas futures, saying they would retreat from the recent spikes and settle at under 5 dollars in the long term as demand weakens, especially for electricity production.

Source: Xinhua News Agency - CEIS

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