Market watch: Friday's barge explosion raises energy futures prices

Sam Fletcher
Senior Writer

HOUSTON, Feb. 24 -- An explosion Friday aboard a barge carrying 100,000 bbl of unleaded gasoline in New York Harbor also lifted energy futures prices on the New York Mercantile Exchange.

The gasoline was being unloaded at the ExxonMobil Corp.'s Port Mobil terminal in Staten Island, NY, when the explosion occurred, killing two Bouchard Transportation Co. Inc. employees and injuring one ExxonMobil employee. (OGJ Online, Feb. 24, 2003).

The April contract for benchmark US light, sweet crudes finished at $35.58/bbl, up 84¢ for the day, after trading as high as $35.95/bbl on NYMEX. The May position increased by 87¢ to $34.33/bbl. Heating oil for March delivery jumped 4.98¢ to $1.11/gal. Unleaded gasoline for the same month advanced 4.7¢ to $1.01/gal.

The March natural gas contract shot up 44.4¢ to $6.61/Mcf as winter storms continued to whip much of the country.

"The market opened up and almost immediately spiked to a daily high of $6.70(/Mcf) as news of the gasoline barge explosion fueled some panic buying, before settling back somewhat to trade mainly between $6.50-6.60(/Mcf) for the rest of the day," said analysts Monday at Enerfax Daily.

"There are about 5 more weeks of winter left, and storage is getting pretty low, causing some storage holders to turn to the cash market to meet incremental heating demand in an effort to conserve petering inventories," said analysts. "Despite mild Northeast and Midwest weather last week, forecasts for another blast of arctic weather early this week helped drive both the cash and futures markets to new highs, particularly with longer-term forecasts calling for a chilly March and growing concerns about storage inventories."

Meteorologists at Salomon Smith Barney Inc., NY, forecast temperatures in the Central and Eastern US will remain well below normal through this week, with 6-12 in. of snowfall expected in major metro centers from Washington, DC, to Boston.

Salomon Smith Barney analyst Robert S. Morris estimated Monday that the US Energy Information Agency later this week will report a withdrawal of 147-157 bcf of natural gas from US underground storage during the week ending Feb. 21, compared with a draw of 203 bcf the previous week.

In London, the April contract for North Sea Brent oil was up 71¢ to $32.27/bbl on the International Petroleum Exchange.

The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes gained 36¢ to $31.84/bbl Friday. For the whole week, however, the price averaged $31.90/bbl, up 43¢ from the previous week.

So far this year, OPEC's basket price has averaged $30.73/bbl, including an average price of $30.34/bbl for the month of January. That compares with an average price of $24.36/bbl for all of 2002.

Contact Sam Fletcher at

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