Oil prices rose on Friday on worries about the Middle East and natural gas regained ground as well after a mild start to winter in the United States had pushed prices to a four-and-a-half-month low.
Light, sweet crude for February delivery rose 76 cents to $63,55 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude gained $1,12 at $62,65 per barrel on the ICE Futures exchange.
Despite huge stocks of crude oil and rising inventories of gasoline and distillates, geopolitical factors such as uncertainties in the Middle East and cold weather in Europe could be enough to keep prices firm, said Sucden Commodity brokers.
It cited concerns about Israel, where the prime minister’s stroke has created uncertainty about regional security, escalating violence in Iraq and festering US-Iran relations.
Heating oil was up two cents to $1,8087 a gallon (3,8 litres), while gasoline rose more than a cent to $1,8020 a gallon. Prices have been in an uptrend since mid-December, and analysts are cautioning that the cost of refined products such as gasoline is likely to rise as the year progresses.
Natural gas rose 35 cents to $9,850 per 1 000 cubic feet, regaining ground lost a day earlier as mild weather tempered traders’ supply concerns and the US Energy Department data showed a surprising increase in natural-gas inventories last week.
February natural-gas futures had slid 69,8 cents to settle at $9,499 on Thursday, the lowest settlement for the front-month contract since August 19, when futures closed at $9,111. Natural-gas prices then soared in the aftermath of Hurricane Katrina’s destruction of Gulf of Mexico platforms, pipelines and processing plants, and the front-month contract hit its peak of $15,78 on December 13.
In its weekly natural-gas report, the Energy Department said underground storage of natural gas in the lower 48 states totalled 2,64-trillion cubic feet last week, an increase of one billion cubic feet from the prior week that left inventories 3% below year-ago levels. Analysts had been expecting a small decline in inventories.
In a separate report, the Energy Department said commercially available supplies of crude oil declined last week by one million barrels to 321,6-million barrels, or 12,5% above year-ago levels.
Among the flurry of data released by the Energy Department was a detail that highlighted one impact of soaring energy prices in 2005: for the first time since 2001, total demand for petroleum and related products declined from the previous year. Energy demand is closely linked to overall economic activity. — Sapa-AP