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Oil steadies, natgas extends slide
12/25/2005
NEW YORK, Dec 24 (Reuters): Oil prices steadied over $58 a barrel yesterday on worries over disruptions to Nigerian exports, while natural gas extended a steep slide on mild US weather forecasts and comfortable stockpiles.
The US government predicted that much of the United States will average warmer than normal through March, with temperatures already rising in the big Midwest and Northeast heating fuel markets.
US crude settled up 15 cents to $58.43 a barrel after bouncing in and out of positive territory. London Brent crude was up 14 cents to $56.69 a barrel.
US natural gas, meanwhile, tumbled 64 cents to $12.283 per million British thermal units, bringing prices down 14 per cent in two days and more than 20 per cent lower since a record $15.78 hit in mid-December.
Natural gas prices began sliding after the US government reported Thursday that stocks fell by a lower-than-expected 162 billion cubic feet last week -- leaving inventories comfortably above the five-year average.
Lost crude supply from Nigeria due to attacks on pipelines remained a supportive factor for oil prices.
US prices have dropped some 18 per cent from a record peak of $70.85 hit at the end of August when hurricane Katrina tore through the Gulf of Mexico, but prices remain more than 30 per cent up from the end of last year.
The president of the Organisation of Petroleum Exporting Countries, Sheikh Ahmad al-Fahd al-Sabah, said he expects the cartel's crude basket to remain between $45 and $55 through 2006, a level OPEC says the world can take in its stride.
The recovery of US oil and natural gas production from the storm-battered Gulf of Mexico continued, though 27.51 per cent of the Gulf's 1.5 million bpd of crude production remained shut in, a US government report showed Thursday.
Output from major non-OPEC producer Russia was forecast to rise 2.9 per cent, or 270,000 bpd, in 2006 as the country has entered a period of more modest growth after impressive spikes in recent years, a Reuters poll of analysts showed.
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