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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: darra who wrote (80906)	12/6/2000 5:39:04 PM
From: excardog	Respond to of 95453

Pretty good read on the oil market today: Dec. 6-MAR-- By Karyn Peterson, BridgeNews New York--Dec. 6--NYMEX crude futures bounced Wednesday amid strength in heating oil prices and a surge in natural gas. The market also was boosted by technical factors, including the reentry of funds into the market following a recent sell-off. Jan crude settled up 32 cents at $29.85, Jan heating oil up 352 points at $1.0118 a gallon, and Jan gasoline up 199 points at 78.21c. * * * "It's a daisy-chain, with natural gas exponentially (pushing) heating oil with it, and then the crack spread can only get so wide before crude goes," John Kilduff, senior vice president at FIMAT Futures, said of the market. NYMEX Jan natural gas futures settled up $1.101 at $8.485 per MMBtu, after jumping during the day session to a new all-time spot month high of $8.80 on forecasts for cool weather that overshadowed a draw of 73 bcf in inventories. Also bullish for distillates Wednesday afternoon was the U.S. Energy Information Administration's forecast that heating oil prices this winter will average about 29% above year-ago levels. EIA said retail heating oil prices were likely to top $1.50 a gallon in December, and average $1.52, about 34 cents over year-ago levels and 12c over the agency's November forecast. Jan crude had moved to an early high of $30.20 amid strength in natgas and heating oil, before retracing those gains and sliding to a low of $28.25 in technical selling, as the market believed that Iraqi exports would resume quickly amid reports that loadings were ready to begin. However, the U.N. overseers that monitor Iraq's crude export compliance under the oil-for-food program and Iraq's State Oil Marketing Organization failed to reach a deal Wednesday on the pricing of those exports, and crude loadings--which Iraq halted since late last week--have still not yet started. Renewed uncertainty about when exports would now begin then underpinned the market Wednesday afternoon, brokers said, as did the market's holding at the key, $28.25 support level. "That generated some buying," Kilduff noted. Gasoline values also saw some limited support, brokers and traders said. "A lot of people think gasoline is way oversold, too cheap, and going higher," one trader added. "And we continually hear about people taking their planned maintenance from March and rolling it to January. So (recent sell-offs) seem a bit overdone." OUTLOOK: The market is expected to remain firm, as funds remain wary of being caught short as natural gas prices--and heating oil--continue to post strong gains ahead of the height of the winter heating season. "We've seen a lot of people who are short-covering today," a broker added. "The market is nervous at $30.00, because it's not sure where the next $2.00 is," headed up or down, he said. "If you're not sure if it can go to $32.00 or to $28.00, then why would you go short?" Also, as a result of the nat gas rally, the first interruptible Northeast natural gas customers must now switch to alternate fuels at 1000 ET Thursday. CH Energy Group's Central Hudson Gas & Electric regulated utility unit said it has told its customers they must switch fuels through possibly January. This switch of interruptible customers is considered a likely harbinger of high demand in the distillate market for the winter, brokers and traders noted. Brokers said nearby support remains at $28.25 and then at the $27.30 level, the low from Aug. 8, while resistance is pegged at around $29.00.