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Frigid Temps Boost Gas Prices

Crude oil is tacking on 15 cents to $59.17 a barrel.

Fuel prices were moving higher Monday as a blast of Arctic cold swept across the Northeast, increasing demand for heat.

Near-dated contracts for natural gas were gaining 15 cents at $7.63 per million British thermal units on the New York Mercantile Exchange. Heating oil was up slightly at $1.69 a gallon.

Gasoline was off a penny at $1.56 a gallon, and light sweet crude oil was tacking on 15 cents to $59.17 a barrel.

Temperatures around New York City were recently about 14 degrees Fahrenheit and are expected to warm only slightly later in the week.

"Most forecasters seem to think temperatures will be below normal through the end of February," says Adam Sieminski, chief energy economist at Deutsche Bank in New York. "The higher prices will last for as long as it's cold," as more fuel is consumed to heat dwellings and businesses.

He adds that the planned production cuts by oil cartel OPEC have been taking oil off the market and helping to buoy prices.

In an effort to keep prices from sliding, OPEC mandated that member countries cut back production by a total of 500,000 barrels a day starting this month, on top of 1.2 million barrels late last year. But not all observers are as convinced as Sieminski.

"Ultimately, we think that the cartel's success or failure regarding its cuts will be gauged by what happens to crude stocks," writes Edward Meir, an analyst with commodity broker Man Financial, in a daily market brief. New data is expected from the Energy Information Administration Wednesday.

In the meantime he says markets do not seem "overly concerned" with inventory issues.

As for stocks making headlines in the energy complex, Goldman Sachs upgraded shares of


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to buy from neutral, helping lift the shares 0.2%.

Deutsche Bank downgraded shares of


(CVX) - Get Chevron Corporation Report

to sell from hold. In addition, CIBC World Markets upped its price target on the stock to $82 a share from $73.

The net result seemed to be a marginal win for the bears, with the stock trading lower by 0.4% despite the strong energy prices.

Calyon Securities was busy downgrading shares of gas companies.

TheStreet Recommends


(WMB) - Get Williams Companies, Inc. Report

was dinged down to an add rating from a buy, while

El Paso


got lowered to neutral from buy. Williams was recently down 0.3% and El Paso by 1.5%.

Among the major producers, shares of

Exxon Mobil

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(COP) - Get ConocoPhillips Report

were down 0.5% and 0.3%, respectively.

The energy exchange-traded funds were mixed, with the

U.S. Oil

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fund off 0.1% and the

iPath Goldman Sachs Crude Oil Index

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up 0.2% in recent action.