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12/29 11:46 Heating Oil Rises as Winter Storm Approaches the Northeast By Mark Shenk

New York, Dec. 29 (Bloomberg) -- Heating oil rose more than 3 percent, pulling crude oil higher, on expectations that a winter storm bearing down on the U.S. Northeast will boost demand in the fuel's biggest market.

Heavy snow and arctic winds will buffet the region tomorrow from Washington D.C. to Boston and heating demand will be above- normal next week, forecasters said. Prospects for increased demand for heating oil have boosted prices 8.5 percent from a four-month low on Dec. 21.

``This super-storm could dump anywhere from 1 to 2 feet of snow in New England, which is potentially explosive for this market,'' said Phil Flynn, senior market analyst at Alaron Trading Corp. in Chicago. The Northeast accounts for 80 percent of U.S. heating oil consumption.

Heating oil for January delivery rose as much as 2.74 cents, or 3.1 percent, to 92.2 cents a gallon on the New York mercantile Exchange. The January contract expires today. February heating oil rose as much as 2.97 cents, or 3.5 percent, to 88.9 cents a gallon.

While heating oil prices have fallen 13 percent this month, they still are up 30 percent from this time last year.

Crude oil for February delivery rose as much as 80 cents, or 3.1 percent, to $26.65 a barrel on the Nymex. Prices have fallen 21 percent this month, leaving them little changed from year-ago levels.

Prospects for more cold weather extended this month's rally in natural gas prices to 49 percent.

Natural gas for February delivery rose as much as 66.2 cents, or 7.1 percent, to $9.925 per million British thermal units on the New York Mercantile Exchange.

Heating Demand

Heating demand will be 23 percent above normal in the Northeast during the next seven days, according to Weather Derivatives, a forecasting firm in Belton, Missouri.

Cold weather helped boost U.S. demand for heating oil 13 percent last week to 1.63 million barrels a day, according to figures in a report Wednesday from the American Petroleum Institute.

A tanker finished loading Iraqi crude oil at the Turkish port of Ceyhan, according to an official at Saybolt International BV, which monitors Iraqi oil exports for the United Nations. It was the first loading at the port since Iraq halted exports on Nov. 13 in a pricing dispute with the United Nations.

``The Turkish pipeline looks like it is pumping again,'' said Ric Navy, a broker at Paribas Futures Inc. in New York. ``Now that they have loaded one tanker, it looks like they are back in business.''

Iraq, the third-largest producer in the Middle East, resumed shipments from its Persian Gulf port of Mina al-Bakr about two weeks ago. The country's oil exports are regulated by the UN under sanctions imposed after Baghdad invaded Kuwait in 1990.

In London, Brent crude oil for February settlement recently was little changed at $23.68 a barrel, down 3 cents, on the International Petroleum Exchange.

The Nymex and the IPE were scheduled to close early today because of the New Year's holiday.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOky.1BVLSGVhdGlu

-- Martin Thompson (mthom1927@aol.com), December 29, 2000