Tags: Oil | Prices

Oil Falls as Global Cold Snap Eases Grip

Tuesday, 12 Jan 2010 02:59 PM

Oil prices fell for a second day Tuesday as a global cold spell eased its grip and pulled crude back from a 15-month high.

Crude prices have jumped 20 percent in the past month as the coldest weather in years took hold. The weather has boosted demand for heating oil in the U.S. Northeast, and natural gas almost everywhere.

Even in the South, where fruit crops were endangered by frigid temperatures, homeowners were reaching for the thermostat.

Duke Energy said Tuesday that its customers in the Carolinas set a record on Monday for power demand during the winter.

Yet the dollar has had more to do with rising energy prices than the cold.

Every time the dollar falls, more investors pile money into dollar-based crude trades. Investors can get more crude for less if they hold euros or other relatively strong currencies.

The government said Tuesday that it expects retail gasoline prices to average $2.84 per gallon this year, an increase of 49 cents from 2009. The Energy Information Administration said prices are likely to pass $3 per gallon during the spring or summer, largely because of rising crude prices.

Those prices are rising even though the EIA said gasoline consumption was flat in 2009 compared with 2008 when the economy was in a tailspin.

There are already signs that the recent bout of cold is losing its power over energy prices. Most meteorologists see temperatures moderating for the rest of the month, though the cold snap along with the weak dollar did help push prices about 15 cents higher per gallon since mid-December on average.

Prices climbed 0.4 cents overnight to a national average of $2.751 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. That's about 96 cents more per gallon than last year at this time.

Benchmark crude for February delivery fell $1.71 to $81.81 a barrel on the New York Mercantile Exchange.

In other Nymex trading in February contracts, heating oil fell 4.76 cents to $2.1325 a gallon and gasoline slipped 4.3 cents to $2.0996 a gallon. Natural gas futures rose 13.7 cents to $5.591 per 1,000 cubic feet.

In London, Brent crude for February delivery fell $1.79 to $79.18 a barrel on the ICE Futures exchange.

——

Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.

© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 
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Oil prices fell for a second day Tuesday as a global cold spell eased its grip and pulled crude back from a 15-month high.Crude prices have jumped 20 percent in the past month as the coldest weather in years took hold. The weather has boosted demand for heating oil in the...
Oil,Prices
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2010-59-12
Tuesday, 12 Jan 2010 02:59 PM
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