Oil, Natural Gas Futures Decline on Profit-Taking, Clinton’s Comments

Oil and natural gas prices pulled back Tuesday after President Clinton said high heating costs this winter will be mitigated by a federal home heating reserve in the Northeast that is nearly full.

But after trading ended, new data showed declines in U.S. crude oil and gasoline inventories.

In New York futures trading, near-term crude futures slid 86 cents to $34.28 a barrel. Heating oil futures slipped fractionally to $1.047 a gallon, and natural gas futures also were off slightly.

Analysts said there was modest profit-taking by traders after crude prices hit a fresh 10-year high Monday despite an agreement Sunday by OPEC members to increase daily crude production 3%.

As U.S. lawmakers are urging the release of crude from the government’s stockpile to reduce prices, Clinton said a new Northeastern heating oil reserve of 2 million barrels is well on its way to being filled.

“We’re working very hard to make sure our home heating oil reserve is filled for the Northeast by the end of October, and I think we’ll get there,” Clinton said. He said his administration also is examining other options to help buffer consumers from high heating costs this winter, but he did not elaborate.

The Energy Department predicts that heating oil will cost consumers an average of $1.31 a gallon nationally at the start of the winter, almost one-third higher than a year ago.

After markets closed Tuesday, a weekly industry report showed a moderate rise in U.S. stockpiles of distillate stocks, which includes heating oil.

However, an expected increase in U.S. crude inventories didn’t materialize.

The American Petroleum Institute said distillate fuel stocks rose 2.1 million barrels to 115 million barrels. That leaves total inventories well below year-ago levels of 143.8 million barrels.

U.S. inventories of crude oil fell by 1.9 million barrels to 288.6 million, API reported.

Stocks of motor gasoline fell by 5.9 million barrels to 195.9 million.

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Still Smokin’

Heating oil futures prices remained near 10-year highs Tuesday, despite modest profit-taking.

Tuesday: $1.047

Near-term heating oil futures in New York, per gallon. Weekly closes and latest.

Source: Bloomberg News