Prices for Heating Oil, Natural Gas on the Rise

By: Clean Skies News, Published: 01/05/10 4:53pm

Prices for the two fuels that keep most U.S. houses warm are heating up, with all but the western edges and southern tips of the country locked into Arctic cold that could last until February.

Home heating oil for February delivery gained 3.5 percent to $2.19 a gallon in Monday trading, while natural gas rose 5.6 percent to $5.88 per thousand cubic feet.

Electronic trading ahead of today's opening was nearly flat for heating oil, but moved down a dime for natural gas.

Forecasters have been sparring over how severe this winter would be, with energy markets betting - by and large - on the mild side.

NYMEX natural gas futures have stayed below $6 before now, though some analysts see that figure changing if the cold continues and fuel stockpile drawdowns accelerate.

A Bloomberg survey indicates analysts are expecting further drawdowns for both heating oil and natural gas when EIA reports later this week.

Last week, a lower than expected drawdown sent natural gas prices downward, naturally shifting all eyes this week to those reports.

Drawdowns in heating oil and other distillates mean more refinery demand for crude oil, and crude prices moved upward again this morning with next month delivery gaining nearly 20 cents on yesterday's settlement price of $81.51 a barrel.

Oil's rise was also attributed to strong economic reports from China and a weakening dollar.