Energy prices fall as mild weather dampens demand
WASHINGTON -- Energy futures prices slipped yesterday despite a nerve-rattling move by Iran to resume nuclear research, and some analysts said it could signal a fading of bullish sentiment.
Above-normal winter temperatures in parts of the United States have dampened demand for home heating fuels such as natural gas, allowing supplies to build while putting downward pressure on prices.
''The laws of economics still apply and higher prices call forth more supply while dampening demand," said Tim Evans, an oil analyst at IFR Energy Services who has held a bearish oil price outlook for some time. ''The long view of the market's history, filled with booms and busts, is on our side."
In the US Northeast, the world's largest consumer of heating oil, temperatures were spring-like and forecasters expect them to continue through the week.
Natural gas for February delivery fell 2.4 cents to settle at $9.336 per 1,000 cubic feet. The front-month contract is down nearly 40 percent since Dec. 13, when it hit a record 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.
Nymex crude oil prices dipped 13 cents to settle at $63.37 a barrel, reversing earlier gains that came after Iran removed seals on its nuclear research facilities, allowing work to resume despite warnings from Western countries concerned about stability in the oil-rich Middle East.
Iran said its action was to prepare for fuel research only and that it was not resuming work to produce nuclear weapons.
February Brent crude futures on London's ICE Futures exchange fell 9 cents to close at $61.92 a barrel. Heating oil futures slid 2.98 cents to $1.7379 a gallon, while gasoline futures fell 3.06 cents to $1.7371 a gallon.
