Natural gas futures hit a record high Monday on the New York Mercantile Exchange as Tropical Storm Debby reached hurricane force as it raced toward Puerto Rico.
With US gas stocks already 15% below year-ago levels, traders worried that the storm could trigger shutdowns of gas production from the Gulf of Mexico.
A pipeline explosion that killed 10 people in New Mexico over the weekend also added to market worries. That mishap caused a 70% reduction of gas transported through the El Paso Energy Co. pipeline, down to 700 MMcfd by late Monday.
The September gas contract jumped 31.1� to $4.75/Mcf on the NYMEX. Market fundamentals had already caused a 20% increase in gas futures prices going into this week, analysts said.
The storm threat also forced Amerada Hess Corp. to start the systematic shut-down of parts of its St. Croix refinery. Concerns over crude supplies resulted in a surge in oil futures prices that triggered technical buying.
The September contract for benchmark US light, sweet crudes closed at $32.47/bbl Monday, up 48� for the day.
The market surge was partly due to expiration Tuesday of the September oil contract. In early trading Monday, prices for that contract were up by more than 90�/bbl before a late round of selling dampened the market. The October oil contract gained 42� to $31.98/bbl.
The September contract for home heating oil jumped 2.41� to 92.32�/gal, while unleaded gasoline for the same month was up 1.63� to 95.93�/gal.
In London, the October contract for North Sea Brent crude oil was unchanged at $30.60/bbl on the International Petroleum Exchange.
Natural gas closed at $2.43/Mcf on the IPE, up 2�.
