Oil Prices Up; Natural Gas Prices Rise

SINGAPORE – Oil prices rose Friday and natural gas regained ground as well after a mild start to winter in the United States had pushed prices to a four and a half month low.

Light, sweet crude for February delivery rose 33 cents to $63.12 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude gained 39 cents to $61.52 per barrel on the ICE Futures exchange.

Heating oil was up half a cent to $1.7936 a gallon, while gasoline rose nearly that much to $1.7901 a gallon. Prices have been in an uptrend since mid-December, and analysts are cautioning that the cost of refined products such as gasoline are likely to rise as the year progresses.

Natural gas rose 30 cents to $9.799 per 1,000 cubic feet, regaining ground lost a day earlier as mild weather tempered traders’ supply concerns and the U.S. Energy Department data showed a surprising increase in natural gas inventories last week.

February natural gas futures had slid 69.8 cents to settle at $9.499 Thursday, the lowest settlement for the front-month contract since Aug. 19, when futures closed at $9.111. Natural gas prices then soared in the aftermath of Hurricane Katrina’s destruction of Gulf of Mexico platforms, pipelines and processing plants, and the front-month contract hit its peak of $15.78 on Dec. 13.

In its weekly natural gas report, the Energy Department said underground storage of natural gas in the lower 48 states totaled 2.64 trillion cubic feet last week, an increase of 1 billion cubic feet from the prior week that left inventories 3 percent below year-ago levels. Analysts had been expecting a small decline in inventories.

In a separate report, the Energy Department said commercially available supplies of crude oil declined last week by 1 million barrels to 321.6 million barrels, or 12.5 percent above year ago levels.

Among the flurry of data released by the Energy Department was a detail that highlighted one impact of soaring energy prices in 2005: For the first time since 2001, total demand for petroleum and related products declined from the previous year. Energy demand is closely linked to overall economic activity.