.Oil Falls to Six-Month Low as Refineries Escape Major Damage
Sept. 14 (Bloomberg) -- Crude oil fell to a six-month low in New York and gasoline tumbled amid signs that refineries along the Gulf of Mexico coast will soon resume operations after escaping major damage from Hurricane Ike.
More than 20 percent of the U.S.'s oil refining capacity was shut, limiting fuel deliveries and prompting the Department of Energy to release 309,000 barrels from its strategic reserves. New York Mercantile Exchange electronic trading opened early today to allow traders to respond to Ike.
``It looks like we've dodged another bullet,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``The refineries in the Houston area seem to have come out of the storm remarkably intact.''
Crude oil for October delivery fell $2.07, or 2.1 percent, to $99.11 a barrel at 5:10 p.m. on the Nymex. Futures touched $98.46, the lowest since Feb. 26. Prices are up 25 percent from a year ago. Gasoline for October delivery fell 11.33 cents, or 4.1 percent, to $2.6563 a gallon in New York.
CME Group Inc., the world's biggest futures exchange, began Nymex electronic trading of energy contracts at 10 a.m. New York time today.
Oil in New York has fallen 33 percent from a record $147.27 a barrel on July 11 as high prices and slowing global economic growth reduce demand for fuels. Sales at U.S. retailers dropped in August for a second straight month and July inventories at American businesses increased the most in four years, Commerce Department reports showed last week.
Trumping Ike
``Growing fears about the economy are trumping any fears about the damage caused by Hurricane Ike,'' said John Kilduff, senior vice president of risk management at MF Global Inc. in New York. ``The broader issue is the weakness of the financial system. Given the Lehman and WaMu watch, cash looks better than any speculative investment.''
Barclays Plc, the U.K.'s third-biggest bank, pulled out of talks to buy Lehman Brothers Holdings Inc. today as the U.S. government raced to find a solution for the faltering investment bank. Washington Mutual Inc. plummeted in New York trading last week on speculation about its financial health.
Fourteen refineries in Texas and one in Louisiana, including plants operated by Exxon Mobil Corp., Valero Energy Corp. and Royal Dutch Shell Plc, shut 3.86 million barrels a day of refining capacity as Ike approached the Gulf Coast.
Valero said it found ``no significant structural damage'' at three Houston-area refineries shut before the storm. One Valero refinery had power, the company said. Marathon Oil Corp. and Motiva Enterprises LLC said they're evaluating their plants.
Pipeline Operations
Colonial Pipeline Co. said today it restored operations to its gasoline and distillate pipelines, which carry from the Gulf Coast to the Northeast.
Regular gasoline, averaged nationwide, rose 6.2 cents to $3.795 a gallon, AAA, the nation's largest motorist organization, said today on its Web site. Pump prices reached a record $4.114 a gallon on July 17.
Pump prices in the Southeast U.S. surged as the Ike made landfall. Regular gasoline in Georgia rose 16.2 cents to an average $4.025 a gallon, the AAA said today. In North Carolina the regular gasoline climbed 11.1 cents to $3.973 a gallon.
``The crude oil price should be lower because with the refineries down, there is nowhere for it to go,'' Kilduff said. ``The drop in product prices may be short-lived because some of these refineries could be down for weeks.''
Heating oil dropped 9.11 cents, or 3.1 percent, to $2.848 a gallon. Heating oil touched $2.8325 a gallon, the lowest since March 5. Trades of all the futures contracts will be recorded as part of the Sept. 15 session.
Hurricane Remnants
The National Hurricane Center released its last advisory on Ike at 10 a.m. Houston time when the remnants of the hurricane were centered 60 miles (97 kilometers) east-northeast of St. Louis. Ike had winds of 110 mph at its landfall in Galveston at 2:10 a.m. yesterday.
The storm idled about 99.6 percent of oil production and 91.9 percent of natural-gas output in the Gulf of Mexico, the U.S. Minerals Management Service said today. Gulf fields produce 1.3 million barrels oil a day, about a quarter of U.S. output, and 7.4 billion cubic feet of gas, 14 percent of the total, government data showed.
Natural gas for October delivery rose 10.4 cents, or 1.4 percent, to $7.47 per million British thermal units in New York.
The Energy Department released 630,000 barrels of crude oil from the strategic reserve to Placid Refining Co. and Marathon Oil Corp. after Hurricane Gustav made landfall in Louisiana on Sept. 1. That brings the total release because of the two storms to 939,000 barrels.
Bloomberg
Expect more violence and the enemy reacts to falling price of petroleum, and more frenzied rhetoric from their leaders
More than 20 percent of the U.S.'s oil refining capacity was shut, limiting fuel deliveries and prompting the Department of Energy to release 309,000 barrels from its strategic reserves. New York Mercantile Exchange electronic trading opened early today to allow traders to respond to Ike.
``It looks like we've dodged another bullet,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``The refineries in the Houston area seem to have come out of the storm remarkably intact.''
Crude oil for October delivery fell $2.07, or 2.1 percent, to $99.11 a barrel at 5:10 p.m. on the Nymex. Futures touched $98.46, the lowest since Feb. 26. Prices are up 25 percent from a year ago. Gasoline for October delivery fell 11.33 cents, or 4.1 percent, to $2.6563 a gallon in New York.
CME Group Inc., the world's biggest futures exchange, began Nymex electronic trading of energy contracts at 10 a.m. New York time today.
Oil in New York has fallen 33 percent from a record $147.27 a barrel on July 11 as high prices and slowing global economic growth reduce demand for fuels. Sales at U.S. retailers dropped in August for a second straight month and July inventories at American businesses increased the most in four years, Commerce Department reports showed last week.
Trumping Ike
``Growing fears about the economy are trumping any fears about the damage caused by Hurricane Ike,'' said John Kilduff, senior vice president of risk management at MF Global Inc. in New York. ``The broader issue is the weakness of the financial system. Given the Lehman and WaMu watch, cash looks better than any speculative investment.''
Barclays Plc, the U.K.'s third-biggest bank, pulled out of talks to buy Lehman Brothers Holdings Inc. today as the U.S. government raced to find a solution for the faltering investment bank. Washington Mutual Inc. plummeted in New York trading last week on speculation about its financial health.
Fourteen refineries in Texas and one in Louisiana, including plants operated by Exxon Mobil Corp., Valero Energy Corp. and Royal Dutch Shell Plc, shut 3.86 million barrels a day of refining capacity as Ike approached the Gulf Coast.
Valero said it found ``no significant structural damage'' at three Houston-area refineries shut before the storm. One Valero refinery had power, the company said. Marathon Oil Corp. and Motiva Enterprises LLC said they're evaluating their plants.
Pipeline Operations
Colonial Pipeline Co. said today it restored operations to its gasoline and distillate pipelines, which carry from the Gulf Coast to the Northeast.
Regular gasoline, averaged nationwide, rose 6.2 cents to $3.795 a gallon, AAA, the nation's largest motorist organization, said today on its Web site. Pump prices reached a record $4.114 a gallon on July 17.
Pump prices in the Southeast U.S. surged as the Ike made landfall. Regular gasoline in Georgia rose 16.2 cents to an average $4.025 a gallon, the AAA said today. In North Carolina the regular gasoline climbed 11.1 cents to $3.973 a gallon.
``The crude oil price should be lower because with the refineries down, there is nowhere for it to go,'' Kilduff said. ``The drop in product prices may be short-lived because some of these refineries could be down for weeks.''
Heating oil dropped 9.11 cents, or 3.1 percent, to $2.848 a gallon. Heating oil touched $2.8325 a gallon, the lowest since March 5. Trades of all the futures contracts will be recorded as part of the Sept. 15 session.
Hurricane Remnants
The National Hurricane Center released its last advisory on Ike at 10 a.m. Houston time when the remnants of the hurricane were centered 60 miles (97 kilometers) east-northeast of St. Louis. Ike had winds of 110 mph at its landfall in Galveston at 2:10 a.m. yesterday.
The storm idled about 99.6 percent of oil production and 91.9 percent of natural-gas output in the Gulf of Mexico, the U.S. Minerals Management Service said today. Gulf fields produce 1.3 million barrels oil a day, about a quarter of U.S. output, and 7.4 billion cubic feet of gas, 14 percent of the total, government data showed.
Natural gas for October delivery rose 10.4 cents, or 1.4 percent, to $7.47 per million British thermal units in New York.
The Energy Department released 630,000 barrels of crude oil from the strategic reserve to Placid Refining Co. and Marathon Oil Corp. after Hurricane Gustav made landfall in Louisiana on Sept. 1. That brings the total release because of the two storms to 939,000 barrels.
Bloomberg
Expect more violence and the enemy reacts to falling price of petroleum, and more frenzied rhetoric from their leaders
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