In a small control room in a compressor station in Siberia, workers are staring at a mass of meters and computer screens, watching the flow of Russian gas from pipelines beneath the ground. They are waiting for a call from Gazprom in Moscow to tell them how much gas is needed today. With the flick of a switch, they can control the flow to customers as far away as Europe. Oleg Vasi, deputy head of Tyumentransgaz, the Gazprom subsidiary in charge, says demand is getting stronger. “Some 20 years ago we had only seven pipelines in Yugorsk,” he says. “Today there are seventeen. We’re now transporting a billion and a half cubic metres every day. This is a lot. The demand has multiplied.”  They have been pumping gas here for more than 40 years. But as demand soars, Gazprom is struggling to produce enough. Its three biggest fields, some way north of here, are in steep decline. Gas production is virtually flat. “We are already short of about 10-15 billion cubic metres (bcm) of gas annually,” says Vladmiir Milov, former deputy Russian energy minister and Gazprom critic. ”And with the decline of matured fields and increased demand it means that in a couple of years this will tremendously grow to about 40-50bcm a year. No one really knows the figure.”  Gazprom’s biggest customer, Russian electricity supplier UES, is already feeling the impact. Last winter was exceptionally cold, but its power stations did not have enough gas to satisfy demand, resulting in power cuts.

Foreign investors have built a new $500m power station in St Petersburg - but there’s no spare gas to fire it.  So why is it that Russia, a country that portrays itself as an energy superpower, is facing gas shortages? Mr Milov says the problem is a lack of investment. “The fact that the big fields are in decline is expected, it’s a natural geographic fact,” he says. “We have large reserves in remote underdeveloped fields way up north in the Yamal Peninsula. But the problem is that during the 1990s and in recent years, even now, these reserves are underdeveloped and not enough money is being spent.  “If only these Yamal fields were developed on schedule we could already have had Yamal gas on the mainland.”

The potential shortfall is sparking concern in Europe, which relies on Gazprom for a quarter of its gas supplies amid growing demand. “The question,” says Marc Franco, the European Union’s ambassador to Moscow, “is: can Gazprom deliver? “If you look at Gazprom’s own production estimates, the forecasts in the near future the next four to five years - are not very promising.  “It is clear from the figures that the short-term kind of company strategy is perhaps maximising short-term profits of Gazprom, but it’s certainly not contributing optimally to the development of the Russian economy.” Gazprom has been spending millions on a host of other assets, including the assembling of a Russian media empire.   These, insists Gazprom head of exports Alexander Medvedev, are “a heritage of the past”.  If that is the case, however, why does Gazprom keep buying more?  “We are doing it in order that the project will be feasible,” says Mr Medvedev. “What we are acquiring could bring additional value to our assets. And I believe that if you look at the quality of the assets they are good.”

Within Russia, gas is very, very cheap, thanks to price controls imposed by the Russian government. And that is the crux of Gazprom’s problems. It barely breaks even on domestic gas sales. It makes most of its profits by selling gas abroad. Jonathan Stern from the Oxford Institute of Energy Studies says it simply has not made commercial sense for Gazprom to develop new fields. “During the 1990s, the price of gas in Russia were far too low to make large-scale investments in new fields profitable,” he argues. “Indeed, prices are still too low today.  All these wrong estimates that Gazprom is under-investing are groundless.  “These new fields require investments of $25-50bn. Now you don’t make those kind of investments unless you’ve got a pretty good expectation that you’re going to get your money back.”   Now, though, the Kremlin has decided to raise domestic gas prices substantially over the next few years and Gazprom, in turn, says it is committed to making big investments in Yamal.   “We have a full-scale production plan and development plan,” says Mr Medvedev.  “I am rather sure that we will be in full compliance with this schedule and that we’ll see the first gas from the Yamal in 2011. That’s why all these wrong estimates that Gazprom is under-investing… they are groundless.”

He was not, however, prepared to put a number to the scale of the investment.

“The investment programme has not been fully approved by the Russian Government,” he said. “That’s why I don’t want to mention the precise figure - but we have presented for approval the sufficient amount.”

Increasingly, though, it seems that Europe is not so sure. Judging by the scale of Gazprom’s empire, there is no doubt that Gazprom really is a global energy giant, operating in some of the most inhospitable territory in the world.  But it faces enormous challenges in developing Russia’s vast fields of the future - the so-called “crown jewels”. And Gazprom’s decisions about how it uses its resources in remote corners of Russia like Yugorsk will be crucial for millions of consumers living a very, very long way from here.
 

UK households are said to be responsible for a quarter of the UK’s total carbon emissions and the Energy Performance Certificate is the Governments latest step in attempting to change house-holders’ attitudes a greener home.  TheRenewableEnergyCentre.co.uk today joined the debate surrounding the new Energy Performance Certificate (EPC) launching this year. The EPC’s are just one part of the controversial proposed House Information Pack (HIP) plan and from June 1st 2007 every house for sale will first need to complete an assessment for its carbon emissions and energy efficiency. Qualified Assessors will rate the properties on a rating scale of A-G and provide recommendations for improving the energy efficiency of the house and possible savings to be made.  Although unpopular with many groups, it was a decision that the Government was forced to make in order to come in line with the EU directive commencing in 2009. The directive states that all homes must be rated on energy efficiency every 10 years. Although the EPC itself could cost homeowners up to £600, the government believes that it will increase public awareness regarding the running costs of UK homes. Furthermore, as consumer demands for greener houses becomes more prevalent house builders and developers will also need to introduce sustainable building practices. However, it has been argued that the EPC requirement may deter sellers from putting their properties on the market speculatively, due to the costs. There are also concerns that poor energy ratings on many older homes may cause a pool of undesirable houses and drive the price of these houses down. In reality the certificate grade will be unlikely to affect buying decisions if people find a house to meet their needs and wants.   Richard Simmons, managing director of The Renewable Energy Centre and a property developer for over 30 years stated: “TheRenewableEnergyCentre.co.uk is an invaluable resource to any individual wanting to make environmental improvements to their home. It contains a fully comprehensive national & local directory of specialist products and suppliers in this arena. This is particularly useful for property owners when researching the options available to them in order to make informed decisions about home energy saving. He continued “Often only a few key areas such as loft insulation or draught proofing doors and windows need to be looked at before booking the assessment to ensure a good rating. The website also offers information on government grants and funding available to them for these types of improvements”.  Although Home Information Packs are still under consideration and may be delayed further, the introduction of Energy Performance Certificates, are imminent. Whether for or against, homeowners, estate agents and environmentalists will soon see if the programme has the government’s desired effect on the UK’s carbon emissions.

About the Renewable Energy Centre:
www.therenewableenergycentre.co.uk
The Renewable Energy Centre: Saving Money, Saving Energy and Saving the Planet
The Renewable Energy Centre is committed to informing all online users about energy saving and renewable energy in order to:
• increase public awareness through accurate and informative resources
• create business opportunities throughout the UK through its’ local and national directories.

Wholesale gas market development will continue at a rapid rate in Europe, particularly after July 2007 when the markets fully liberalise. However, research indicates that the prospects for the development of these markets will continue to show enormous variation across the EU. As market liberalization continues, the importance of wholesale gas markets in Europe is set to grow markedly in the coming years. However, the development of these wholesale markets will continue to be at widely diverse rates across the EU.   Factors such as new infrastructure development and current and future levels of market concentration will combine with the market opening process to drive forward the already established, and establishing, markets. Further to this, over the next decade, these factors create scope for the beginning of the emergence of wholesale markets in countries where they do not yet exist.  The wholesale markets can be split into three groups the established grouping for markets that are both liquid and fully established, the emerging segment for markets with some, but limited, liquidity, and the nascent grouping for markets that exist but have little or no meaningful liquidity.  Currently, there are only three markets in the established segment in Europe the UK’s National Balancing Point (NBP) (which accounts for around half of European established wholesale gas liquidity), the Title Transfer Facility (TTF) market in the Netherlands and the Zeebrugge market in Belgium. The NBP very much leads the way for European gas wholesale market liquidity and will continue to do so in the future.  The NBP’s position as Europe’s most liquid wholesale market is largely attributable to the long history of market opening in the UK compared to elsewhere in Europe. With a number of players supplying both the residential and non-residential markets, the need for a wholesale market for players structurally short of gas to obtain supplies led to the development of the NBP.   Other factors that have helped drive the development of the NBP have been the UK’s role as a gas producer, the variety of gas import infrastructure available in the UK and the presence of a strong financial services community willing to speculate on gas prices.   While the NBP’s position as the leading wholesale gas market in Europe is undeniable, the role of Europe’s second most liquid wholesale market is less clear cut.   In the past, Zeebrugge has taken second place to the NBP in terms of liquidity, although, increasingly, the TTF is challenging this position. Zeebrugge first emerged as a gas hub in 1999 and, whilst a liquid trading hub in its own right, relies on NBP arbitrages for a significant proportion of its trade.  The TTF, which was launched in 2002, is seeing rapid growth in liquidity. Between 2005 and 2006, TTF traded volumes grew by around 80%, and, towards the end of 2006, the TTF edged past Zeebrugge in terms of liquidity for the first time.   This pattern is likely to continue going forward. The growth prospects for the TTF appear to be stronger than those currently apparent for Zeebrugge. Liquidity at Zeebrugge continues to be curtailed by the dominance of Distrigas, while interest and counter-parties at the TTF continue to show continued growth potential.  This continued growth in TTF liquidity will not come as a result of organic market growth alone. Various initiatives by both the Dutch government and the regulator all bode well for continued future development of the TTF. 

There are currently two markets in the emerging markets category - the French Points d’Echange de Gaz (PEG) and the Italian Punto di Scambio Vitruale (PSV) markets.  The PEG market began to emerge in 2004 with the creation of a number of notional trading zones. Initially, trading activity was extremely limited, although, more recently, there has been a renaissance in liquidity levels, with 25 registered users now trading.  The creation of a standard trading contract by the European Federation of Energy Traders in December 2004 and the first brokered (rather than bilateral) PEG deal in April 2005 were both key developments in the maturity of the market. The PEGs are increasingly showing their ability to create market reflective pricing, rather than simply pricing relative to the TTF or PSV, thus making them more attractive to various market players.  The PSV market came into being in October 2003 and, in common with the TTF, is heavily modeled on the UK’s NBP. After a lackluster start, traded volumes have developed rapidly, rising by more than 170% between 2005 and 2006.  Going forward, both the PSV and PEG will grow strongly in liquidity. Growth in the PSV and PEG markets will see increased numbers of counter-parties seeking to source gas for their retail businesses. Further to this, there will be greater interest from speculative financial, rather than just physical traders. Within the short term, the PSV and PEG markets are likely to move out of the emerging segmentation into the established zone. In the nascent markets - Spain, Germany and Austria - the prospects for market development are much less clear cut.  The Spanish Centro de Gravedad (CDG) market shows few, if any, prospects for meaningful liquidity growth in the coming years. While general market developments such as increased LNG capacity, spot LNG volumes and the arrival of new market entrants will help drive some added degree of liquidity, there is little to suggest this will be anything other than modest.

Similarly, the prospects for the Austrian Central European Gas Hub (CEGH) market also appear likely to remain modest. Despite a significant percentage increase in CEGH liquidity in 2006, absolute volumes remain modest. The gas release scheme will help drive liquidity to a limited degree, but meaningful liquidity growth remains a number of years away. The prospects for the CEGH are only likely to be significantly increased when a number of new infrastructure projects take place. Gas flows arising from projects such as a Croatian LNG facility or the Nabucco pipeline will help boost CEGH volumes, although these are much longer-term prospects, meaning that the CEGH will see only very limited growth in the short to medium term. The prospects for German wholesale liquidity growth are by far the strongest of all the nascent markets. Despite going back to 2002, wholesale gas trading in Germany only began to become recognizable in 2006 with the launch of a number of new hubs. The BEB hub, the three E.ON Ruhrgas hubs and the Gaz de France Deutschland hub have all shown considerable growth in a very short time period.

Changes to the entry-exit regime and a reduction in the number of pipeline zones will serve to facilitate easier pipeline access and thus give a fillip to German wholesale gas trading.   Further to this, the planned launch of a German gas exchange by the EEX in October 2007 will serve to further boost liquidity. The short-term prospects for German wholesale gas trading are significant. It is expected to rapidly move out of the nascent segmentation and for liquidity levels to show significant, rapid and sustained growth in 2008 and beyond.

Britain’s biggest electricity supplier has been accused of misleading its customers with a phoney price cut.  Npower boasted it would cut its electricity prices by an average of 3% from the end of next month. But it emerged yesterday that about half of its 4m electricity customers will not see a single penny cut. The German-owned company is cutting only in parts of the country where it has relatively few customers and hopes to attract more. London will see cuts of 14% but in the North, Yorkshire and the Midlands where Npower is already the main supplier, prices will be frozen or fall by just 0.9%. Adam Scorer, director of campaigns at consumer watchdog Energywatch, attacked the firm for boasting about a ‘fake’ price cut. He said: ‘They are rewarding loyalty with higher prices and just going after the new customers in other parts of the country. It is a fake price cut. ‘They must think to themselves: ‘’Why cut prices in areas where we are dominant? Most of the customers are going to stick with us because of inertia. We might lose some, but not many’.'  He said it was a ‘very, very disappointing’ trick by the company, which raised its electricity prices three times last year.  The huge regional variations in Npower’s price cut mean it can accurately claim that the average electricity bill is coming down by 3%. The firm insisted it had not intended to mislead customers into thinking they are getting a great deal. It said: ‘There is nothing hidden about it. We have to compete more keenly in areas where nobody knows us.’ Consumers have seen four of the ‘Big Six’ energy suppliers announce price cuts in the past month. Only EDF Energy and Scottish Power are yet to follow suit. Both say they are monitoring prices but customers still have not been given an indication of when or even if they will see prices fall.  Npower’s tactic of applying bigger cuts in some parts of the country than others illustrates the difficulty consumers can have when assessing the cheapest supplier.

Ofgem has published international network utility National Grid’s first consultation on UK energy supplies for winter 2007. The utility has reported that significant investment in new gas provisions should continue to ease the gas supply situation looking forward, but has warned against complacency.  National Grid commented that while gas supplies from the North Sea are set to decline further, new sources of gas due to come on stream during 2007 will be able to deliver an extra 50 million cubic meters of gas a day. The utility added that this was over 10% of the gas Britain would use on a very cold day.  These new gas sources include the connection of the Langeled pipeline to the new Norwegian Ormen Lange gas field which is due to take place this winter. Once connected, this source alone could deliver a fifth of Britain’s gas needs on an average winter day. National Grid also reported that the expansion of the new interconnector pipeline with Holland has increased capacity from 10 billion cubic meters (bcm) a year to 15 bcm a year, and that two new LNG terminals in Milford Haven will add another 16 bcm of potential gas import capacity. The utility added that a new storage facility is being constructed at Aldbrough and that the existing Hole House Farm gas storage facility is being expanded to increase the UK’s gas storage capacity. In its consultation, National Grid commented that the UK is becoming increasingly linked to the wider European gas market and the emerging global LNG market; connections that will greatly impact gas supplies to the UK. While this would appear to be positive, National Grid also warned that if there are supply shocks in other countries, prices in the UK may have to rise to continue to attract LNG and piped gas from Europe. Commenting on the report Steve Smith, Ofgem’s managing director of markets, said: “While National Grid’s preliminary report forecasts an increase in gas supply compared to this winter, there can be no grounds for complacency. No one can predict next winter’s weather, so customers and the industry must prepare for all eventualities.” 

Total U.K. gas supplies for winter 2007-2008 are seen rising 14.9%, or 52 million cubic meters a day, to 402 mcm/day as a string of new pipeline and liquefied natural gas imports projects come on stream, said U.K. gas and electricity network operator National Grid PLC Tuesday.  The rise in imports is seen more than making up for the expected 7% fall, or 16 mcm/day, in gas production from the U.K. continental shelf to 224 mcm/day, National Grid said in its Winter 2007/2008 Preliminary Consultation Report. These figures exclude gas flows from storage.  But the report noted that if current low gas prices continue into next winter, then demand may rise faster than the 1% per annum predicted, particularly in the power generation sector.  “As this level of supply will exceed the level of demand on most days within the winter, it is reasonable to expect major variations in the supply pattern,” said the report.  Despite the good supply outlook, Steve Smith, Managing Director of Markets and U.K. gas and electricity regulator Ofgem said: “There can be no grounds for complacency. No one can predict next winter’s weather, so customers and the industry much prepare for all eventualities.  “Questions remain about how much gas will be available from Europe and Norway. It is therefore vital that both British and European energy suppliers provide National Grid with accurate information about potential energy supplies for next winter.”  National Grid’s assumption for gas imports from Norway is 70 mcm a day, an increase of 45.8% from the current winter. Additional flows from the new Ormen Lange field, which is due to begin commercial deliveries of 30 mcm a day on Oct. 1 will make up most of the increase, the report said.  The Tampen Link, which is due to connect Norway’s Statfjord field to the St. Fergus terminal in Scotland is expected to bring in only modest quantities of gas, the report said.  Gas flows through the Bacton-Balgzand pipeline connecting the U.K. to the Netherlands are expected to be little changed at around 25 mcm a day. National Grid sees import flows through the Interconnector pipeline to Belgium at 30-40 mcm per day.  The biggest proportional increase in imports will come from new liquefied natural gas import terminals, the report said. LNG imports are seen more than doubling to an average of 46 mcm a day over the winter.  The majority of the increase will come from the new LNG terminals at Milford Haven in South Wales, which National Grid said could to import a maximum of 65 mcm a day of gas. The extent to which this capacity will be utilized is not clear, the report said. “There is uncertainty over whether the U.K. will attract LNG next winter in preference to alternative markets, notably the U.S. where current forward gas prices are higher through to next winter and broadly similar for the key winter months,” it said.  The report gave an initial assumption for flows of 20 mcm a day from each of the new Milford Haven terminals once operational, and a combined 13 mcm a day from existing LNG terminals on the Isle of Grain and Teesside.  The report assumed weather-corrected peak power demand for next winter to be unchanged at 60.8 gigawatts, although this forecast was tempered with the acknowledgment that National Grid is still unsure why peak power demand fell by 0.5 gigawatts from winter 2005/2006 to 2006/2007. “Likely causes include increased demand management due to high end-user prices, increased embedded renewable generation and continued energy efficiency” the report said. “We would welcome views on…whether demand might be expected to decline further,” the report said. Available power generation capacity is anticipated to be 74.8 gigawatts, assuming a wind-farm load factor of 35%. This is lower than the previous winter due to the closure of nuclear reactors Dungeness A and Sizewell A and reduced capacity at the Hinkley Point and Hunterston reactors, representing a total loss of around 1.6 gigawatts of capacity.  National Grid’s analysis assumes average weather conditions with overall temperatures across the winter at 7 degrees Celsius.

Britain still faces gas supply uncertainty next winter because new import facilities do not guarantee delivery and demand could be much higher, network operator National Grid said on Tuesday.  Britain sailed through an unusually warm winter very comfortably supplied with gas and without really testing its improved import infrastructure, National Grid said. But new pipelines and liquefied natural gas import terminals cannot guarantee healthy supply at low prices if next winter is cold, because other countries could offer producers more money for their product, the power and gas network operator said in its preliminary consultation on supplies for Winter 2007/08.  “Whilst developments in importation infrastructure continue, the supply-demand outlook for 2007/8 remains uncertain,” the grid said its report.  “The range of potential supply availability is wide, reflecting not only the normal risks associated with major infrastructure but also commercial uncertainties associated with the utilisation of the infrastructure.”  Stephen Smith, the managing director of markets at UK energy regulator Ofgem said that, despite a big fall in wholesale prices since new pipelines like Langeled from Norway and BBL from the Netherlands opened last year, there are a “number of risks and challenges” in the outlook for the winter.  “It is unclear to what extent we can rely on the gas import pattern seen this winter being repeated in future years, particularly against different gas demand conditions in Continental Europe,” Smith said.  While Britain’s ability to import enough gas to keep warm was greatly improved by new pipelines opened last autumn, the country also enjoyed its warmest winter since records began, meaning much less gas was needed for heating.  Mild weather across Europe also meant there was little demand for gas on the continent and led to a slide in UK gas prices, reversing years of soaring fuel costs spurred by rapidly declining UK domestic output.  Average wholesale gas prices during winter 2006/07 were nearly 60 percent lower than the average for winter 2005/06, according to Ofgem.  Gas demand would have been even lower had it not been for long term outages at nuclear power plants and falling gas prices leading to more being used for power generation.  “Last winter the operation of the electricity market was characterised by gas-fired generation displacing coal-fired generation,” National Grid said, adding that gas demand for power generation had far exceeded forecasts.  Because gas was used as fuel for around one-third of all the power generated in the UK over the period, day-ahead baseload power prices have also fallen by about 50 percent year on year, Ofgem said.

Oil struck its highest level of 2007 near 64 usd in London as tensions with Iran continued to stoke supply fears.  Yesterday, Iran shunned another attempt by the UN to force the country to halt its uranium enrichment programme, heightening already volatile tensions and sparking supply fears.  At 10.22 am, London Brent crude for May delivery was up 64 cents at 63.82 usd a barrel, after adding 67 cents to settle at 63.18 usd on Friday. Prices had hit 63.97 usd earlier in the session.  New York crude for May delivery was up 60 cents at 62.89 usd a barrel.  The UN Security Council announced new resolutions on Saturday which ban Iran from exporting conventional arms and call for freezing financial assets abroad of 28 individuals and groups. Some of those affected are reported to be involved in militant movements outside Iran.  “I can assure you that pressure and intimidation will not change Iranian policy,” said Iranian Foreign Minister Manouchehr Mottaki, after hearing the updated sanctions. “Suspension is neither an option nor a solution.” Energy market participants fear if the West takes draconian measures to stop Iran’s nuclear programme the country might retaliate by refusing to supply oil.  Tensions were already high on news on Friday that 15 UK sailors and marines were seized by Iranian naval vessels in Persian Gulf waters.  “The international incident brings into focus the tensions surrounding the oil producer and the West, coming as it does when the UN are discussing a fresh resolution on Iran’s contentious uranium enrichment programme,” said Paul Harris, Bank of Ireland analyst. Oil was also underpinned as last week’s snapshot of oil stocks in the US last week showed gasoline fell by more than the market had expected.

More developments in a protracted takeover battle in the European energy industry gave investors in Scottish & Southern Energy pause for thought today.  Germany’s Eon and a combination of Italy’s Enel and Spanish property group Acciona are fighting for control of Endesa, the Spanish utility. This morning Eon raised its bid for the third time in an attempt to see off its rivals ahead of this week’s closing date for its offer. Eon is now prepared to spend €42.3bn on Endesa, up 45% from the original bid. Meanwhile Enel and Acciona said they were prepared to offer €41 a share, compared to Eon’s €40 bid.   The relevance of all this to SSE is that many traders believe that if Eon does not win the day, it will turn its attention to the Scottish group, and the latter’s shares have moved sharply higher as a consequence.   But today’s increase in the Eon offer indicates the Germans are not about to give up easily, and some of the takeover froth was blown away from SSE, which slipped 34p to £15.12 by mid-afternoon. Endesa later recommended the Eon bid.

Oil prices rose above US$62 a barrel in Asian trading Monday on continued tensions between Iran and the West following Iran’s detention of British naval personnel.  British Prime Minister Tony Blair on Sunday called the Iranian seizure of the 15 sailors and marines “unjustified and wrong,” saying that London saw their situation as “very serious.” Iran suggested that the group may be tried for illegally entering Iranian waters. Light, sweet crude for May delivery rose 37 cents to US$62.65 a barrel in electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore.  The contract hit a 3-month high last Friday to close at US$62.28 a barrel after Iran detained the sailors, sparking concerns that an escalation in the conflict could cut Persian Gulf oil exports.

Brent crude contract for May delivery gained 38 cents to US$63.56 a barrel on the ICE Futures exchange in London.  Western tensions with Iran also increased after the United Nations voted Saturday to impose new and tougher sanctions against Iran for its refusal to stop enriching uranium a move intended to show Tehran that defiance will leave it increasingly isolated.  Iranian President Mahmoud Ahmadinejad vowed Sunday that the latest U.N. sanctions would not halt the country’s uranium enrichment “even for a second.”  While the oil market may seem to have factored in the violence in Iraq and issues surrounding it, the latest events in Iran have kept oil prices elevated, said Andrew Harrington, an analyst with ANZ Global Natural Resources in Sydney.  “Now we’re looking at a situation where some of that political risk premium is coming back into oil prices,” he said. “The tension between Iran and the U.K. adds another element which the energy market will have to take into account. It complicates issues. It is one of those unusual type of situations that then causes people to reassess where they stand,” Harrington said.  The West strongly suspects Iran’s nuclear activities are aimed at producing weapons though Tehran says they are exclusively for the production of energy.  In other Nymex trading, heating oil futures gained 1.29 cents to US$1.7240 a gallon (3.8 liters) while natural gas prices added a cent to US$7.279 per 1,000 cubic feet.