Sam Fletcher
Senior Writer
HOUSTON, July 5 -- Energy prices soared on July 1, recovering much of the losses in previous sessions ahead of the 3-day Fourth of July US holiday weekend, historically one of the largest automotive and aircraft travel periods of each summer.
The American Automobile Association estimated that a record number of people may have traveled in the US over the holiday weekend, despite higher fuel prices.
Retail pump prices for regular self-serve gasoline averaged $2.22/gal across the nation on July 1, up 4¢/gal for the second week in a row, AAA reported. "Until crude prices drop for a sustained period, we're likely to see continued increases at the pump," said an AAA representative.
Meanwhile, the National Hurricane Center in Miami reported Tropical Storm Cindy was about 200 miles south-southwest of the mouth of the Mississippi River early July 5, moving north at 14 mph toward Louisiana, where it may make landfall by evening or early morning. Although not as severe a threat as a hurricane to offshore operations, the storm could disrupt imports through the Louisiana Offshore Oil Port (LOOP) off Louisiana.
A tropical storm warning was issued for 220 miles of the Gulf Coast from Intracoastal City, La., to Pascagoula, Miss., including New Orleans and Lake Pontchartrain. Another tropical depression was reported to be gaining strength July 5 in the southeast Caribbean.
Energy prices
The August heating oil contract led the price rebound at the end of last week, closing at a record $1.7111/gal, up 7.5¢ for the day, after hitting an intraday record of $1.735/gal, the highest price for a front-month heating oil contract since that commodity began trading on the New York Mercantile Exchange in 1979.
US demand for distillate fuel—including heating oil and diesel—has increased 6% since this same period last year. That level of increased demand has kept heating oil futures prices above gasoline futures prices for the longest period on record, analysts said.
The August contract for benchmark US sweet, light crudes jumped by $2.25 to $58.75/bbl July 1 on NYMEX. On the US spot market, West Texas Intermediate was up by $2.26 to $58.76/bbl. Gasoline for August delivery increased by 8.27¢ to $1.65/gal on NYMEX. Natural gas for the same month escalated by 19¢ to $7.17/MMbtu, "backed by a strong rebound in crude oil prices and some short covering [of open sales contracts] ahead of the long weekend," said analysts at Enerfax Daily.
Moreover, "composite spot cash prices [for natural gas] rose last week in response to continued above-normal temperatures across much of the country early in the week, while concerns arose regarding a tropical weather disturbance [Cindy] in the Caribbean sea at the end of the week," said Robert S. Morris, Banc of America Securities, New York, in a July 5 report.
In London, the August contract for North Sea Brent crude increased by 40¢ to $57.94/bbl on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes gained 83¢ to $53.41/bbl. After NYMEX prices for near-month crude futures tumbled below the $60/bbl mark early last week, OPEC members suspended talks on raising their production quota by another 500,000 b/d.
Contact Sam Fletcher at [email protected]
