HOUSTON, Aug. 25 -- Energy prices increased Aug. 24, reclaiming a portion of the losses in the previous session, as new storm activity threatened the Gulf of Mexico.
"Oil and gas [prices] are up on fears that a tropical storm is building in the Caribbean," said analysts Aug. 25 in the Houston office of Raymond James and Associates Inc. "Satellite imagery shows that showers and thunderstorms have intensified near the center of Tropical Depression 5, which may develop into Tropical Storm Ernesto if the trend continues. By early next week, we will have a better picture of the potential impacts (if any) on the gulf."
Meanwhile, Tropical Storm Debby, the fourth named storm of this hurricane season, is gaining strength in the eastern Atlantic and may develop into a hurricane. However, most meteorologists say its isolated location in the Atlantic likely will not threaten the US.
Also contributing to the rise in energy prices was a BP PLC report that it cut production from the Prudhoe Bay oil field by 90,000 b/d to 110,000 b/d, about a quarter of its normal output (OGJ Online, Aug. 24, 2006). The company said the additional reduction resulted from the failure of a gas compressor and would take several days to fix.
In Nigeria, three oil industry workers were reported missing Aug. 25, the day after another group of kidnapped workers were released by local militants in the oil producing Niger Delta.
The October contract for benchmark US light, sweet crude gained 60¢ to $72.36/bbl Aug. 24 on the New York Mercantile Exchange. The November contract increased by 46¢ to $73.32/bbl. On the US spot market, West Texas Intermediate was up 60¢ to $72.02/bbl. Heating oil for September delivery increased by 2.68¢ to $2.03/gal. Unleaded gasoline for the same month inched up by 0.21¢ to finish at $1.86/gal. The September natural gas contract jumped by 20.4¢ to $7.08/MMbtu, wiping out the previous day's loss.
In London, the October IPE contract for North Sea Brent crude increased by 66¢ to $72.68/bbl. Gas oil for September was up by $5.75 to $648.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes lost 33¢ to $67.01/bbl on Aug. 24.
Contact Sam Fletcher at email@example.com.