Sam Fletcher
Senior Writer
HOUSTON, July 7 -- Energy commodity prices skyrocketed to all-time highs with crude topping $61/bbl July 6 on the New York market among fears that a threatening hurricane may disrupt oil and natural gas production in the Gulf of Mexico.
"Bad news on the path of Hurricane Dennis could continue to drive the market," said analysts July 7 at Enerfax Daily. "If it continues on its predicted path and becomes a category 3 storm, crude oil prices could go over $65/bbl, and natural gas could go above $8/MMbtu."
Meanwhile in the Caribbean, Hurricane Dennis slowed and strengthened to a category 2 storm with sustained winds of 105 mph. It was reported early July 7 to be centered 130 miles east-southeast of Kingston, Jamaica, and 165 miles south of Guantanamo Bay, Cuba, moving northwest at 10 mph.
The National Hurricane Center's 5-day projection of the storm's possible path has it crossing western Cuba on July 8 and entering the Gulf of Mexico. On that path, Dennis would approach the central Gulf Coast on July 10 and make landfall near Mobile, Ala., July 11. However, forecasters warned that the storm is still too far away to predict accurately. Therefore, its potential track could vary from southwest Florida to the Yucatan Peninsula in Mexico.
Refiners set records
Crude input into US refineries increased by 194,000 b/d to 16.5 million b/d, the highest weekly average ever, during the week ended July 1, said the Energy Information Administration in a July 7 report. US refineries were operating at 98.1% of their capacity ahead of the extended Fourth of July weekend, "the highest weekly utilization rate since the week ended Jan. 1, 1999," said EIA officials. "Gasoline production increased some, averaging over 9.2 million b/d, and the highest weekly average ever. Distillate fuel production increased substantially, averaging 4.5 million b/d, the highest weekly average ever recorded."
Commercial US inventories of crude fell by 3.6 million bbl to 324.9 million bbl during the week ended July 1. US gasoline stocks dropped by 900,000 bbl to 215.3 million bbl in the same period, while distillate fuel stocks jumped by 4 million bbl to 117.2 million bbl.
Imports of crude into the US dropped by 752,000 b/d to 10.2 million b/d within the same week.
Record energy prices
The August contract for benchmark US sweet, light crudes closed at $61.28/bbl July 6 on the New York Mercantile Exchange, up by $1.69 for the day to the highest settlement since that market began trading crude futures in 1983. During that session, the contract also hit an intraday high of $61.35/bbl. The September contract was up by $1.39 to $62.13/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., gained $1.69 to $61.29/bbl.
Gasoline for August delivery soared by 10.81¢ to $1.7899/gal on NYMEX, the highest closing in that market since it began trading in 1984. In the process, it hit an intraday record of $1.7935/gal. Heating oil for the same month also set new records, up by 6.24¢ to a record settlement of $1.7948/gal after touching an all-time intraday high of $1.798/gal.
The August natural gas contract spiked up by 21.3¢ to $7.69/MMbtu on NYMEX, surging higher for the third consecutive session. On July 7, EIA reported 63 bcf of natural gas was injected into US underground storage during the week ended July 1. That was below the consensus projection by Wall Street analysts and down from injections of 92 bcf the previous week and 109 bcf during the same period a year ago. US gas storage now stands at nearly 2.2 tcf, up by 155 bcf from a year ago and 242 bcf higher than the 5-year average.
In London, the August contract for North Sea Brent crude gained $1.56 to $59.85/bbl on NYMEX.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes increased by 90¢ to $54.80/bbl on July 6.
Contact Sam Fletcher at [email protected]