Heating Oil and Natural Gas Prices Soar Amid Arctic Blast

Strategic Insights -

A severe cold snap over the Midwest has caused a dramatic increase in heating oil and natural gas prices, with the price of February No. 2 heating oil futures reaching 51.26 cents per gallon, the highest level since late November. The surge in prices was driven by a 2.35-cent-per-gallon jump, with a net rise of $1.34 per barrel over Thursday and Friday. The Northeast and Midwest, which account for 90% of the nation's home heating oil consumption, are expected to experience their lowest temperatures in 10 years over the weekend.

Key Takeaways:

  • The price of February No. 2 heating oil futures reached 51.26 cents per gallon, the highest level since late November, following a 2.35-cent-per-gallon jump.
  • The net rise in No. 2 prices over Thursday and Friday was $1.34 per barrel.
  • February natural gas futures leaped 10.1 cents per MMBtu before easing back to $2.268 per MMBtu, a net gain of 7.4 cents.
  • Temperatures in the Northeast were expected to be their lowest in 10 years over the weekend.
  • Crude oil prices also surged, with February West Texas Intermediate crude oil futures having a peak gain of 65 cents per barrel.
  • Refining margins are increasing, driven by the product price rally, which is in turn boosting demand for crude oil.
  • MG Trading, a financially troubled affiliate of German firm Metallgesellschaft A.G., is facing significant challenges, with a group of international banks announcing a financial rescue plan.
  • Oil companies sharply raised wholesale distillate prices, with low-sulfur diesel increasing by 0.44 cents to 50.27 cents per gallon.

Statistics:

  • February No. 2 heating oil futures: up 2.35 cents per gallon to 51.26 cents
  • Net rise in No. 2 prices over Thursday and Friday: $1.34 per barrel
  • February natural gas futures: leaped 10.1 cents per MMBtu before easing back to $2.268 per MMBtu
  • Net gain in natural gas futures: 7.4 cents
  • Temperatures in the Northeast: expected to be their lowest in 10 years over the weekend
  • Crude oil prices: February West Texas Intermediate crude oil futures had a peak gain of 65 cents per barrel
  • Refining margins: increasing, driven by the product price rally
  • Demand for crude oil: boosted by increasing refining margins

Sources:

  • "Heating oil, gas prices jump amid arctic blast" by AP
  • "Nymex Heating Oil Futures" by New York Mercantile Exchange (Nymex)
  • "February Natural Gas Futures" by New York Mercantile Exchange (Nymex)
  • "The Oil Daily" by The Oil Daily in cooperation with Computer Petroleum Corp.