Crude follows natural gas lower on mild forecasts

New York (Platts)--27Dec2005

World crude benchmarks were sharply lower in the first post-Christmas
trading session Tuesday, pulled down by plummeting natural gas amid forecasts
for mild temperatures in much of the US.

     February light, sweet crude on the New York Mercantile Exchange was 93
cts lower at $57.50/bbl just after noon EST, while February IPE Brent was 89
cts to the downside at $55.80/bbl.

     Natural gas was the driving force Tuesday, with forecasts calling for
mild temperatures in the US Northeast through this week, and possibly beyond.
The January gas contract on NYMEX was $1.218 lower at $11.065/MMBtu.

     "The bearish weather factor that weighed heavily on first quarter values
during the past couple of sessions is being sustained into the new week with
the help of extended warm temperature expectations..," energy consultant Jim
Ritterbusch said in a report. "...this week's [gas] storage report, scheduled
for usual release on Thursday, will likely have a minor impact as primary
focus will remain on the daily weather updates." 

     The other so-called "weather" fuel -- heating oil -- was 5.23 cts lower
at $1.6530/gal on NYMEX. Unleaded gasoline was at $1.53/gal, down 2.05 cts.

     The market appeared unmoved by a fire on a products pipeline in Nigeria,
the cause of which was not immediately known. The blaze comes a week after
Shell's major Bonny Light pipeline in Nigeria was attacked, forcing the major
to declare force majeure on 180,000 b/d of Bonny crude exports.

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