Oil prices fluctuated Thursday, Dec. 20, as traders weighed forecasts for a warmer winter — which could lower demand for heating and crude oil — against data suggesting supplies are falling.
Natural gas futures fell after the government reported that inventories declined less than expected the week of Dec. 9.
The National Oceanic and Atmospheric Administration said Dec. 20 that the beginning of winter will be warmer than normal in the eastern two-thirds of the nation, which includes the heating oil-dependent Northeast, Dow Jones Newswires reported.
Warmer weather could mean lower demand for heating oil and natural gas.
On the other hand, on Dec. 19 the government reported that supplies of heating and crude oil fell sharply the week of Dec. 9. Heating oil supplies are nearly 30 percent below five-year average levels, said James Cordier, president of Liberty Trading Group in Tampa, Fla.
“We have a struggle with supplies,” Cordier said.
Energy futures alternated between gains and losses. Light, sweet crude for February delivery fell 37 cents to $90.87 on the Nymex, while January heating oil fell 0.54 cent to $2.5924 a gallon.
January natural gas futures fell 12.8 cents to $7.051 per 1,000 cubic feet on the Nymex after the government reported that inventories fell the week ending Dec. 14 by 121 billion cubic feet, less than analysts had expected.
Gasoline futures for January delivery fell 1.2 cents to $2.3199 a gallon on the Nymex. In London, February Brent crude futures fell 68 cents to $90.80 a barrel on the ICE Futures exchange.
At the pump, meanwhile, gas prices fell 0.5 cent overnight to a national average of $2.985 a gallon, according to AAA and the Oil Price Information Service. Gas prices have mostly fallen since peaking at over $3.11 a gallon in mid-November as oil prices approached $100 a barrel.
Oil prices have since retreated as OPEC has boosted output and several forecasters have lowered their predictions of how fast demand is growing.
Many traders shrugged off the Energy Department’s report that crude oil supplies fell by 7.6 million barrels the week of Dec. 9. Much of that drop was due to a sharp decline in imports of almost a million barrels a day because fog closed the Houston Ship Channel, analysts said.
Of more concern that week was the 2.1 million barrel decline in distillates, which includes heating oil and diesel fuel. Crude and heating oil prices jumped Dec. 19. But those concerns were largely neutralized Dec. 20 by the forecasts for warmer weather, analysts said.