Wintry weather drives energy prices higher
2/8/2010NEW YORK — Energy prices climbed Monday as another winter storm was expected to dump even more snow on the East Coast.
Already, parts of Virginia, Maryland, Pennsylvania and Washington are blanketed in about three feet of snow, knocking out power for tens of thousands of people and forcing government offices to close.
As those regions dig out and warm up, analysts said they expected to see sizable draws on the country's supply of natural gas and heating oil. Mid-Atlantic states are some of the biggest natural gas and heating oil consumers in the country.
Oil, heating oil and gasoline prices increased in response. But natural gas remains in huge surpluses in the U.S., and prices slid about 2 percent.
The National Weather Service said Monday that another storm could drop at least a foot of fresh powder on the beleaguered Mid-Atlantic. Forecasters said the storm will be strongest in central northern Maryland, northern Delaware, and parts of New Jersey and Pennsylvania.
Forecaster Bruce Sullivan said the agency doesn't "really see any warm weather in sight."
The Weather Service also issued storm warnings throughout much of the Midwest. Temperatures on Tuesday are expected to get no higher than the 20s across large sections of the U.S. from Montana to Maine, according to agency forecasts.
Heating oil for March delivery added less than a penny at $1.8835 a gallon on the New York Mercantile Exchange
If heating oil prices keep rising, utilities will eventually try to pass those costs along to consumers in higher rates. But it usually takes an extended surge in futures prices to affect home heating bills.
Benchmark crude for March delivery added 70 cents to settle at $71.89 a barrel on the Nymex. In London, Brent crude gained 55 cents at $70.14 on the ICE futures exchange.
At the pump, gasoline prices fell a half penny overnight to a new national average of $2.652 a gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 8.5 cents cheaper than last month, but it's still 73.1 cents more expensive than the same time last year.
In other Nymex trading in March contracts, gasoline rose less than a penny to $1.89 a gallon. Natural gas gave up 4.6 cents at $5.469 per 1,000 cubic feet.