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Energy prices up on storm threat to production
Source: Agencies |
September 24, 2010, Friday
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OIL prices rose yesterday after two reports provided some hope for the economic recovery strengthening.
The Conference Board said its index of leading economic indicators increased more than expected in August and the National Association of Realtors said sales of previously occupied homes rose 7.6 percent last month after plummeting in July.
Benchmark oil for November delivery rose 47 cents to settle at US$75.18 a barrel on the New York Mercantile Exchange. In other trading, heating oil rose 0.75 cent to settle at US$2.1145 a gallon and gasoline added 1.60 cents to settle at US$1.9174 a gallon.
In London, Brent crude gained 16 cents to settle at US$78.11 a barrel on the ICE Futures exchange.
Natural gas prices also edged higher yesterday as traders kept an eye on a potential tropical storm that could disrupt Gulf of Mexico production.
In addition, natural gas inventories rose less than expected last week and electricity demand increased from year-ago levels, which helped to push up prices. Natural gas gained 5.3 cents to settle at US$4.019 per 1,000 cubic feet on the Nymex.
The National Hurricane Center said thunderstorms south of the Gulf of Mexico could become a tropical depression. With peak hurricane season at hand, traders are concerned about the potential for interruptions in offshore production even though natural gas supplies remain 6.2 percent above the five-year average.
Mike Zarembski, a senior commodity analyst at OptionsXpress Inc. in Chicago, said just the threat of a storm will keep traders on edge until hurricane season ends in November.
The Energy Department said natural gas inventories rose 73 billion cubic feet to 3.349 trillion cubic feet last week. That was less than analysts expected but still 6.2 percent more than the five-year average.
Warm fall weather boosted electricity production 3.1 percent from the same week in 2009, according to the Edison Electric Institute. More utilities are using cheap natural gas instead of coal to generate electricity, so extending the cooling season helps support gas prices.
Natural gas prices likely will fall once the storm threat in the Gulf has passed, MF Global analyst Mike Fitzpatrick said in a note to clients. "There is just too poor a fundamental picture to justify any significant rally," he stated. "The onset of winter, at least enough to ramp up demand, is weeks away and storage is well more than ample."
The Conference Board said its index of leading economic indicators increased more than expected in August and the National Association of Realtors said sales of previously occupied homes rose 7.6 percent last month after plummeting in July.
Benchmark oil for November delivery rose 47 cents to settle at US$75.18 a barrel on the New York Mercantile Exchange. In other trading, heating oil rose 0.75 cent to settle at US$2.1145 a gallon and gasoline added 1.60 cents to settle at US$1.9174 a gallon.
In London, Brent crude gained 16 cents to settle at US$78.11 a barrel on the ICE Futures exchange.
Natural gas prices also edged higher yesterday as traders kept an eye on a potential tropical storm that could disrupt Gulf of Mexico production.
In addition, natural gas inventories rose less than expected last week and electricity demand increased from year-ago levels, which helped to push up prices. Natural gas gained 5.3 cents to settle at US$4.019 per 1,000 cubic feet on the Nymex.
The National Hurricane Center said thunderstorms south of the Gulf of Mexico could become a tropical depression. With peak hurricane season at hand, traders are concerned about the potential for interruptions in offshore production even though natural gas supplies remain 6.2 percent above the five-year average.
Mike Zarembski, a senior commodity analyst at OptionsXpress Inc. in Chicago, said just the threat of a storm will keep traders on edge until hurricane season ends in November.
The Energy Department said natural gas inventories rose 73 billion cubic feet to 3.349 trillion cubic feet last week. That was less than analysts expected but still 6.2 percent more than the five-year average.
Warm fall weather boosted electricity production 3.1 percent from the same week in 2009, according to the Edison Electric Institute. More utilities are using cheap natural gas instead of coal to generate electricity, so extending the cooling season helps support gas prices.
Natural gas prices likely will fall once the storm threat in the Gulf has passed, MF Global analyst Mike Fitzpatrick said in a note to clients. "There is just too poor a fundamental picture to justify any significant rally," he stated. "The onset of winter, at least enough to ramp up demand, is weeks away and storage is well more than ample."
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