Energy prices lower, still around 2-year highs

[December 30, 2010]  NEW YORK (AP) -- Energy prices fell Wednesday while the East Coast continued to dig itself out of Monday's blizzard and a cold snap swept across other parts of the country.

Heating oil, natural gas and other energy commodities usually get more expensive as the weather chills. But analysts said most traders already have locked in their energy contracts for the year, and those still buying are looking ahead to 2011. With the U.S. sitting on higher than average heating oil and natural gas supplies, temperatures would need to drop much lower for a longer period to raise prices, analyst Tom Kloza with Oil Price Information Service said.

"We haven't seen it desperately cold, which is what it would take," he said.

The Northeast was blanketed by snow earlier this week, and the region continued to struggle to clear some roads and rail lines. Officials at the New York area's three major airports said runways were open Wednesday morning but it might take days for all the passengers who have camped out in terminals to get flights out. Meanwhile, another storm system was expected to bring rain and snow from the Pacific, and heavy snowfall was expected across northern Arizona.

Benchmark oil for February delivery gave up 37 cents to settle at $91.12 per barrel on the New York Mercantile Exchange. Oil jumped above $90 per barrel this month, setting new two-year highs as investors anticipated rising demand in 2011. Prices have held above that level all week.

The rise in oil pushed gasoline prices higher as well. The national average added 1.2 cents overnight at $3.061 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 20.4 cents higher than it was a month ago and 45.3 cents more than it was last year at this time.

In other Nymex trading for contracts: heating oil for January delivery fell less than a penny to settle at $2.515 per gallon, gasoline for January delivery lost 1.52 cents to settle at $2.3904 per gallon and natural gas for February delivery gave up less than a penny to settle at $4.287 per 1,000 cubic feet.

In London, Brent crude lost 24 cents to settle at $94.14 per barrel on the ICE Futures Exchange.

[Associated Press; By CHRIS KAHN]

Associated Press writers Samantha Henry in New York and Alex Kennedy in Singapore contributed to this story.

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