NYMEX crude near new 29-month highs as products rally
www.forbes.com Reuters, 02.19.03, 1:00 PM ET
NEW YORK, Feb 19 (Reuters) - NYMEX crude oil futures hit fresh 29-month highs midday Wednesday, lifted by surging heating oil and gasoline futures, ahead of Thursday's inventory reports forecast to show draws for all three segments.
Heating oil in the New York Harbor cash market remained strong on tight supplies, and bolstered futures, traders said.
Gasoline futures firmed on Midwest refinery trouble and talk of another similar problem at a Texas refinery, traders said.
At 12:50 p.m. EST (1750 GMT), NYMEX March crude was up 28 cents at $37.23 a barrel after soaring to $37.35, the highest for prompt crude since September 2000. It dipped to $36.36 early.
NYMEX April crude gained 23 cents to $35.74 ahead of the March contract's expiry on Thursday.
In London, April Brent was off 9 cents at $32.45 a barrel.
Government oil inventory data to be released Thursday were expected to show that U.S. crude oil stocks fell modestly by 1.0 million barrels, a Reuters survey on Tuesday showed.
Analysts also expected a draw of 3.0 million barrels in distillates, including heating oil and a minor decline of 500,000 barrels in gasoline stocks.
"Gasoline is up because of expectations that tomorrow's weekly inventory data will show a stock draw as Venezuela seems to be taking the gasoline imports away from the United States," said Ed Silliere, energy market analyst at Energy Merchant LLC in New York.
Silliere also cited a downed gasoline-making unit at BP Plc's <BP.L> (nyse: BP - news - people) 420,000 barrel per day refinery in Whiting, Indiana, as supportive.
Other traders said there was talk of a fluid catalytic cracker down atthe ChevronTexaco (nyse: CVX - news - people) 90,000 bpd refinery in El Paso, Texas, also fueled buying in gasoline futures. The company said its policy is not to comment on such reports.
Heating oil futures were supported by forecasts of colder weather returning to the U.S. Northeast, the biggest consumer of heating oil, by next week.
Private weather forecaster Meteorologix said after above-normal temperatures Friday to Saturday in the U.S. Northeast, readings will turn below normal on Sunday. In the next 6 to 10 days, it expects regional temperatures to be much below normal.
Traders said the market remains wary as the United States and Britain, despite strong international opposition, are pushing for a new U.N. resolution that would authorize the use of force to disarm Iraq.
But the new resolution may not be put to a vote before early March, after another report by chief weapons inspector Hans Blix, diplomats said on Wednesday.
Before deciding about launching a military strike against Iraq, the U.S. appears willing to devote a few weeks to getting international support, leading analysts and diplomats to believe a possible attack would not take place before mid-March.
Meanwhile, the Nigerian government said an urgent meeting it called on ending a strike by senior oil workers had been postponed by one day, to Thursday, to allow union leaders more time to arrive.
Earlier, Nigeria's Labor Minister Musa Gwadabe said the government would ask striking oil workers to call off their action immediately before any negotiations.
The strike, launched Saturday, has so far not affected oil Nigeria's oil exports as replacement staff has taken over the striking workers at oil terminals.
On Wednesday, OPEC said its oil production rose by 820,000 barrels a day (bpd) to 25.68 million bpd in January from December, as Saudi Arabia, Nigeria and Iran increased output to offset a decline in Venezuelan production.
Venezuela, another OPEC member, is struggling to restore crude production curbed by a strike that started Dec 2. It supplied about 13 percent of U.S. daily oil imports before the strike.
NYMEX March heating oil