Oil prices steady near $64 a barrel
Oil prices finished steady near $64 a barrel Thursday, with jitters over Iran’s nuclear ambitions and traders’ expectations of rising energy demand offset by above-normal temperatures in the U.S. and signs of growing supplies.But natural gas futures settled below $9 per 1,000 cubic feet for the first time in nearly five months after a U.S. government report showed weak demand last week for the industrial and home-heating fuel.After briefly climbing above $65 a barrel, light sweet crude for February delivery settled at $63.94 a barrel, unchanged on the New York Mercantile Exchange. In London, Brent crude futures rose 45 cents to settle at $62.62 a barrel on the ICE Futures exchange.The mild weather in the U.S. Northeast and Midwest weighed on home-heating fuels, sending heating oil futures down by 1.58 cent to settle at $1.7113 per gallon and natural gas futures 29.5 cents lower to $8.943 per 1,000 cubic feet. That was the lowest settlement since Aug. 18, when the front-month contract settled at $8.928.Natural gas is down 43 percent since Dec. 13, when it hit an all-time peak of $15.78 on concerns of a potentially cold winter and disrupted production in the Gulf of Mexico in the wake of Hurricane Katrina.Unleaded gasoline futures declined by 1.46 cent to close at $1.7185 per gallon.The threat of instability in the Middle East has raised concerns on oil markets this week after Iran – a major oil producer – said Tuesday it would allow work at its nuclear research facilities to resume despite warnings from Western countries.”We believe that Iran matters more than is currently priced in, and that Iran’s external relations remain the key wild card,” Barclays Capital’s Paul Horsnell wrote in a research note. “We continue to see Iran as representing a severe upside risk for prices this year.”Iran said its action was to prepare for fuel research only and that it was not resuming work to produce nuclear weapons.The U.S. and Britain said Wednesday that Western countries will likely seek economic sanctions against Iran after it restarted nuclear activity. Iran’s president said his country would not be “bullied” and would push ahead with the program.But on Thursday, the U.S. Energy Department laid a bearish blanket on the market with a report showing that domestic natural gas stocks declined last week by just 20 billion cubic feet to 2.62 trillion cubic feet, in line with year ago levels. A day earlier the agency said domestic supplies of gasoline grew by 4.5 million barrels last week and that supplies of distillate fuel, which include heating oil and diesel, increased by 4.9 million barrels.But the agency’s weekly report also showed that U.S. demand for gasoline and jet fuel has held firm over the past month, and that has bolstered the view that the economy is not being negatively affected by high prices.Vail, Colorado
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