Heating oil, gas up slightly as storms hit
Heating oil and natural gas prices inched higher Wednesday as another powerful winter storm barreled toward the energy hungry Northeast, AP reported.
The pattern has been in place throughout one of the snowiest winters on record as a glut of supply is more than capable of meeting demand.
"Heating oil is not responding to the weather, natural gas has been lower all winter," said oil trader and analyst Stephen Schork.
Nearly 2 feet of snow has fallen over parts of eastern New York over the past day, while at least a foot has hit an area from Pennsylvania to New England. A foot or more is on the way for much of the region.
About 80 percent of all heating oil in the U.S. is consumed in the Northeast, yet prices have been remained fairly level over the winter despite the exceptional cold and snow. Huge stockpiles of natural gas, used to heat about half of the nation's homes, have been cut dramatically, but prices continue to stay low.
Heating oil prices for March delivery rose 0.98 cent Wednesday to settle at $2.0421 per gallon on the New York Mercantile Exchange. Natural gas prices gained 3.8 cents to settle at $4.816 per 1,000 cubic feet.
The latest storms won't be enough of a drain on distillate supplies used to make heating oil to boost prices this late in the season, said Jim Ritterbusch of Ritterbusch and Associates.
High unemployment and lagging consumer confidence, the worst since 1974, continue to be a drag on the economy coming out of the Great Recession and are dampening demand for energy supplies.
Retail gasoline prices headed higher for the seventh straight day, climbing 1.8 cents per gallon to a national average of $2.678 per gallon, according to AAA, Wright Express and Oil Price Information Service.
Prices, which have been going up on the back of higher oil prices, are now up 7.8 cents over the past week and 77.8 cents higher than a year ago.
Crude prices got a boost Wednesday after U.S. stock markets rallied nearly 1 percentage point, giving investors hope that oil demand will pick up in the second half of the year on an improving economy, Ritterbusch said.
Prices rose even though the Energy Information Administration reported that oil inventories rose by 3 million barrels last week and that supplies are still well above average for this time of year.
Oil has bounced between $70 a barrel and $80 for most of the last six months as investors wait for signs that U.S. crude demand is catching up with an overall economic recovery.
Benchmark crude for April delivery rose $1.14 to settle at $80 per barrel on the Nymex.
In other Nymex trading in March contracts, gasoline added 3.33 cents to settle at $2.0989 a gallon.
In London, Brent crude gained 84 cents to settle at $78.09 on the ICE futures exchange.