Winter Weather Boosts Natural Gas and Heating Oil Prices, Crude Oil Values Decline

Strategic Insights -

Temperatures plummeting to sub-zero levels in the Midwest and Northeast have created a surge in demand for natural gas and home heating oil, driving prices up. However, the rise in gasoline prices pulled down crude oil futures. As winter weather continues to dominate the market, energy prices remain volatile. The American Automobile Association reported self-service retail prices of unleaded regular gasoline at an average of $1.06/gallon, the lowest in 20 years, after adjusting for inflation. The Natural Gas Clearinghouse reported a 20% increase in median prices for one-month spot natural gas supplies for February, up from January and 59% from February 1993.

Key Takeaways:

  • February No. 2 heating oil futures on the New York Mercantile Exchange rose as much as 1.4*/gallon and fell as much as 1.7* before closing at 53.70*/gallon, up 1* on the day.
  • March natural gas futures fell 0.8*/MMBtu before climbing as much as 7.1*, before closing at $2.554, up 2.6*.
  • Median prices for one-month spot natural gas supplies for February at leading pipeline receipt points averaged $2.18/MMBtu, up 20% from January and 59% from February 1993.
  • Unleaded regular gasoline for February delivery to New York Harbor expired at 42.54*/gallon, a drop of 0.92*, after being down as much as 1.8*.
  • The American Automobile Association reported self-service retail prices of unleaded regular gasoline in the U.S. market at $1.06/gallon, the lowest in 20 years, after adjustment for inflation.
  • Russia announced its intention to maintain its oil exports in 1994 at 1993 levels.
  • U.S. wholesale products prices softened only slightly Monday, with oil companies trimming an average of 0.12*/gallon from unleaded regular to 49.19*.

Statistics:

  • Natural Gas:

+ Median prices for one-month spot supplies for February at leading pipeline receipt points averaged $2.18/MMBtu, up 20% from January and 59% from February 1993.

+ March natural gas futures climbed as much as 7.1% to $2.554, up 2.6% on the day.

  • Heating Oil:

+ February No. 2 heating oil futures rose as much as 1.4*/gallon and fell as much as 1.7* before closing at 53.70*/gallon, up 1* on the day.

  • Gasoline:

+ Unleaded regular gasoline for February delivery to New York Harbor expired at 42.54*/gallon, a drop of 0.92*, after being down as much as 1.8*.

+ Self-service retail prices of unleaded regular gasoline in the U.S. market averaged $1.06/gallon, the lowest in 20 years, after adjustment for inflation.

  • Crude Oil:

+ March West Texas Intermediate crude oil futures fell 15% to $15.19/bbl.

  • Other:

+ U.S. wholesale products prices softened only slightly Monday, with oil companies trimming an average of 0.12*/gallon from unleaded regular to 49.19*.

Sources:

  • The Oil Daily nationwide rack price survey produced by Computer Petroleum Corp.
  • New York Mercantile Exchange
  • Natural Gas Clearinghouse
  • American Automobile Association
  • Russia's announcement cited in The Oil Daily