Heating oil and natural gas prices inched higher Wednesday as another powerful winter storm barreled toward the energy hungry Northeast.
The pattern has been in place throughout one of the snowiest winters on record as a glut of supply is more than capable of meeting demand.
“Heating oil is not responding to the weather, natural gas has been lower all winter,” said oil trader and analyst Stephen Schork.
Nearly 2 feet of snow has fallen over parts of eastern New York over the past day, while at least a foot has hit an area from Pennsylvania to New England. A foot or more is on the way for much of the region.
About 80 percent of all heating oil in the U.S. is consumed in the Northeast, yet prices have been remained fairly level over the winter despite the exceptional cold and snow. Huge stockpiles of natural gas, used to heat about half of the nation’s homes, have been cut dramatically, but prices continue to stay low.
Heating oil prices for March delivery rose 0.74 cent Wednesday to $2.0397 per gallon on the New York Mercantile Exchange. Natural gas prices gained 9.3 cents at $4.871 per 1,000 cubic feet.
Crude prices got a boost Wednesday after U.S. stock markets rallied nearly 1 percentage point, giving investors hope that oil demand will pick up in the second half of the year on an improving economy, Ritterbusch said.
Prices rose even though the Energy Information Administration reported that oil inventories rose by 3 million barrels last week and that supplies are still well above average for this time of year.
Oil has bounced between $70 a barrel and $80 for most of the last six months as investors wait for signs that U.S. crude demand is catching up with an overall economic recovery.
Benchmark crude for April delivery rose 95 cents to $79.81 on the Nymex. The contract lost $1.45 to settle at $78.86 on Tuesday.
In other Nymex trading in March contracts, gasoline added 0.88 cent at $2.0744 a gallon.
In London, Brent crude gained 79 cents at $78.04 on the ICE futures exchange. (AP)
