Crude-Oil Rises Amid Snowstorm Warnings
Thursday, November 17th 2005, 9:17 am
By: News On 6
SINGAPORE (AP) _ Crude-oil prices opened the week higher Monday, lifted by forecasts of a winter storm approaching the northeastern U.S. that is likely to boost demand for heating fuels in that key market.
Elsewhere, Saudi Arabia said a ``roadmap'' to match consumption and supply needs was needed to avoid either gluts or shortfalls. The world's top producer of crude also said the lack of information, not supply, was one of the root causes for roller-coaster oil prices.
Light, sweet crude for January rose as much as 55 U.S. cents to $57.76 a barrel in electronic trading on the New York Mercantile Exchange. The front-month contract price is 20 percent higher than a year ago, but has dropped about 19 percent since hitting an all-time high of $70.85 when Hurricane Katrina made landfall Aug. 30.
January Brent crude on the ICE Futures exchange in London rose 61 U.S. cents to $55.51 a barrel.
``The decline in prices of $15 since the late summer peak is now creating a guessing game about where the market bottom might be,'' said Energyintel analyst Tom Wallin in a research note.
Some analysts feel there is adequate supply to meet rising demand in winter, when consumption of heating oil and natural gas increase.
Others say more stocks are needed, especially when forecasters are predicting a frigid winter in the northeastern United States, the world's biggest heating oil market. Any supply outage from the weather or geopolitical uncertainties could cause prices to spike because of the world's limited excess capacity to deal with such shocks, experts said.
Crude-oil prices rose Monday amid forecasts by AccuWeather on Sunday that predicted a winter storm could dump snow on the northeastern states of New York, Pennsylvania, Vermont, New Hampshire and Maine by midweek.
In trading Monday, heating oil was up 2.84 U.S. cents to $1.7246 a gallon while gasoline was up by 1.7 cents to $1.4790 a gallon. Natural gas fell 24.4 cents to $11.170 per 1,000 cubic feet.
Over the weekend, Saudi Oil Minister Ali Naimi blamed the instability of the oil market on excessive and inaccurate speculation.
``The absence of clear and accurate information is one of the biggest problems facing the market,'' Naimi said Saturday.
Saudi Arabia is the biggest member of the Organization of Petroleum Exporting Countries cartel, which supplies nearly 40 percent of the world's oil.
``We don't want to build and construct an expansion of production while we don't have enough demand, or know how much demand we will have,'' said Naimi. ``The reason we ask for a roadmap for consumption is to try to avoid a mismatch between what producers do and what consumers do.''