NYMEX oil to surge as heating oil, natgas soar

www.forbes.com Reuters, 02.25.03, 9:41 AM ET NEW YORK, Feb 25 (Reuters) - NYMEX crude oil futures should open higher on Tuesday fueled by soaring heating oil and natural gas amid more Arctic weather in the United States and as the possibility of war with Iraq hovers in the background. NYMEX April crude was called to open 40 cents to 50 cents higher after ending overnight ACCESS trading up 48 cents at $36.96 a barrel, trading $36.49 to $37.02. In London at 9:30 a.m. (1430 GMT), April Brent crude traded 52 cents higher at $33.67 a barrel. "Crude will open higher but the story is also natural gas," said a NYMEX floor trader, noting the heating oil and natural gas futures should push crude futures, pending more provocative headlines on Iraq or other simmering hot spots. In overnight ACCESS trading, NYMEX Henry Hub natural gas futures hit $11.899, a new all-time high. The March contract, due to expire on Wednesday, finished ACCESS trading at $10.90 per million British thermal units (mmBtu), easily eclipsing the $10.10 previous high for front month U.S. gas hit in late December 2000. OPEC-member Venezuela's struggle to bring crude output back amid a lingering strike that started Dec. 2 has helped boost crude prices, but also crimped refining both in Venezuela and the United States, pushing U.S. products inventories down. With March refined products contracts nearing a Friday expiration, NYMEX March heating oil was called 3.00 cents to 3.40 cents higher after ending ACCESS trade up 3.33 cents at $1.18 a gallon, an overnight and all-time high. The new all-time high for a front-month contract extended Monday's surge. Nearby technical resistance is expected at $1.20. Support is due at $1.15, the all-time high trade eclipsed on Monday. NYMEX March gasoline was called to open 1.00 cent to 1.25 cents higher after ending overnight trade up 1.25 cents at $1.06 cents a gallon, the ACCESS high. Resistance is expected at $1.0720. Support is expected at $1.03.30. As the possibility of a war in Iraq keeps supporting energy prices, on Monday, the United States, Britain and Spain submitted a draft resolution to a polarized U.N. Security Council that said Baghdad had missed a "final opportunity" to disarm peacefully and avoid war. President Saddam Hussein's top scientific advisor, General Amer al-Saadi, said on Tuesday Iraq was still considering a U.N. order to begin destroying its illicit al-Samoud missiles by March 1. A flurry of diplomatic activity on Tuesday will see Joschka Fischer, foreign minister of Germany, Europe's strongest opponent to war, meeting British Foreign Secretary Jack Straw and Prime Minister Tony Blair in London. U.S. Undersecretary of State John Bolton was scheduled to hold a news conference in Moscow at 1530 GMT after meeting Russian officials for talks on Russia's nuclear energy program with Iran. Traders will be anticipating government weekly oil inventory data to be released on Wednesday morning, expected to show U.S. distillate stocks, including heating oil, shrank again as a monster snowstorm buried the U.S. Northeast last week. In a Reuters survey, six analysts forecast an average distillate draw of 2.6 million barrels, in the week to Feb. 21. The average forecast for crude stocks was for a modest build of 1.0 million barrels, helped by increased imports.