By OGJ editors
HOUSTON, July 23 -- Energy futures prices registered strong gains Thursday, led by natural gas, which jumped above $6/Mcf again in New York after the US Energy Information Administration reported smaller-than-expected injections into underground storage.
Early Thursday, EIA reported the injection of 72 bcf of natural gas into US underground storage in the week ended July 16, down from 108 bcf last week and 77 bcf a year ago (OGJ Online, July 22, 2004). Storage now stands above 2.2 tcf, representing a surplus of 246 bcf from the same period last year and 57 bcf above the 5-year average.
That report triggered what some described as "a buying spree" in natural gas futures on the New York Mercantile Exchange. "In a reversal of recent circumstances, crude oil futures followed natural gas higher," said analysts Friday at Enerfax Daily. "With no real change in fundamentals, traders were looking to yesterday's weekly EIA storage report for direction and found it."
As a result, the August natural gas contract increased for the third consecutive session on NYMEX, up 22.1¢ Thursday to $6.15/Mcf. That in turn pulled up heating oil for August delivery, which gained 3.52¢ to $1.1179/gal on NYMEX. Gasoline for the same month increased by 1.44¢ to $1.2572/gal.
"The market is sensitive to any news of a fundamental nature about natural gas and heating oil because of lower-than-usual stocks," the news agency of the Organization of Petroleum Exporting Countries reported Friday. "Concentration of refiners on gasoline production throughout this summer so far, because of lower stock of that product, has alleviated the possibility of a shortage of gasoline, but it has left home heating oil stocks at a much lower than normal level for this time of year."
Meanwhile, the September contract for benchmark US light, sweet crudes gained 78¢ to $41.36/bbl Thursday on NYMEX, while the October position advanced by 79¢. To $40.88/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by 63¢ to $41.46/bbl.
In London, the September contract for North Sea Brent crude increased by 85¢ to $38.01/bbl on the International Petroleum Exchange. Gas oil for August delivery gained $10 to $356.25/tonne. The August natural gas contract inched up by 1.9¢ to the equivalent of $4.02/Mcf on IPE.
The average price for OPEC's basket of seven benchmark crudes rose by 44¢ to $36.60/bbl Thursday.