Energy Prices Catch Big Bid

Updated from 2:47 p.m. EST

Energy prices surged Monday as frigid weather blanketed the Northeast and talk of a major acquisition swirled in the natural gas sector.

Crude for January delivery gained $1.92 to close at $61.31 a barrel, heating oil added 4 cents to $1.77 a gallon, and unleaded gasoline rose 5 cents to $1.65 a gallon. Natural gas rose 53 cents to $14.84 per million British thermal units.

The rally came as ConocoPhillips reportedly is negotiating to acquire Burlington Resources for more than $30 billion. The deal, which hasn't been discussed publicly by either company, would create the largest natural gas producer in the country. About 80% of the target company's assets are in North American natural gas.

News of the deal drove shares of Burlington up 8.4% to $82.50, and propelled other natural gas companies higher. EnCana(ECA) rose 2.3% to $51.24, Devon Energy(DVN) jumped 1.7% to $66.39, and Anadarko Petroleum(APC) increased 2% to $98.77.

ConocoPhillips shares shed 2.9% while shares of fellow supermajors Exxon Mobil, BP(BP) and Chevron(CVX) were all up a little over half a percent.

In Kuwait, the Organization of the Petroleum Exporting Countries, which supplies about 40% of the world's crude, agreed at its meeting Monday to keep pumping at near 25-year highs to meet rising world demand.

"We don't want to scare the market" at a time of rising demand, Sheikh Ahmad al-Sabah, OPEC's president and Kuwait's energy minister said at the meeting, Bloomberg reported. "The winter has started, and it looks like it will be a cooler winter."

After Hurricane Katrina shut down much of the Gulf of Mexico's oil and gas production, OPEC offered all of its capacity to the world markets through 2005. Although the group's 10 active members -- Iraq is not included -- have a daily quota of 28 million barrels, many members are pumping more than the self-imposed limits. All told, the group, including Iraq, is churning out 30 million barrels a day to meet high demand around the world.