By the OGJ Online Staff
HOUSTON, Aug. 28 -- US futures prices for natural gas continued to fall Monday with record storage levels predicted for this winter, but gasoline futures moved up as supplies tightened ahead of the Labor Day holiday this weekend.
In all, the American Automobile Association predicted, 33.2 million travelers will take a trip 50 miles or more from home this Labor Day weekend, up from the 32.6 million estimated to have traveled last year. Of those traveling, 27.7 million are expected to go by motor vehicle.
Meanwhile, pump prices have increased 5¢/gal in the past month to a nationwide average of $1.455/gal for self-serve regular unleaded gasoline, said AAA officials. They attributed that increase to a fire that damaged Citgo Petroleum Corp.'s 158,650 b/d Lemont, Ill., refinery.
Citgo officials said it could take 6 months to repair that damage (OGJ Online, Aug. 24, 2001). A distillation tower at the refinery's crude unit suffered a structural failure Aug. 17 as a result of conditions present after an Aug. 14 fire, company officials said. They asked the US Department of Energy and the Environmental Protection Agency to help ease the gasoline supply situation primarily in the Chicago and Milwaukee markets where gasoline prices were up by 20¢/gal last week.
The September contract for unleaded gasoline gained 0.25¢ to 83.82¢/gal Monday on the New York Mercantile Exchange. Home heating oil for the same month rose 0.41¢ to 75.01¢/gal.
But the September contract for natural gas plunged 16.2¢ to $2.54/Mcf on the NYMEX.
Injections of natural gas into US underground storage facilities have continued at an average rate of 4-5 bcfd above year-ago levels since mid-May. "Injections would have to average only 1.6 bcfd over last year for the remainder of the injection season for natural gas storage levels to reach 3.2 tcf by the beginning of November, versus just under 2.75 tcf last year," said Robert Morris, energy analyst at Salomon Smith Barney Inc., in his weekly exploration and production report Monday.
As a result, he said, "Further downside lies ahead for natural gas prices as it becomes ever more apparent that storage will be at record levels entering this winter."
The October contract for benchmark US light, sweet crudes dropped 23¢ to $26.67/bbl Monday on the NYMEX. The November contract also was down 13¢ to $26.78/bbl.
The International Petroleum Exchange in London was closed Monday.
