HOUSTON, Oct. 26 -- Energy prices jumped Oct. 25 as a cold snap in the US Midwest and Northeast prompted worries about possible shortages of natural gas and heating oil this winter.
"Temperatures in New York and Chicago are expected to stay below normal for this week with highs in the low to mid-50s," said analysts at Enerfax Daily. "The latest National Weather Service forecast for next week calls for above-normal temperatures for most of the nation, with seasonal or below-seasonal readings expected [along] the East and Gulf Coasts." Meanwhile, the National Oceanic and Atmospheric Administration is predicting the US winter will be 6.5% colder than last year but 0.7% warmer than the 30-year average.
The US Minerals Management Service said Oct. 25 that 24 rigs and 238 production platforms were still vacant in the Gulf of Mexico. Shut-in production included more than 1 million b/d of crude and 5.6 bcfd of natural gas, amounting respectively to 68.9% and 55.8% of normal daily production from gulf waters. Total production lost from federal leases in the gulf since Aug. 26 now stands at 68.6 million bbl of crude and 348.1 bcf of natural gas. That represents 12.5% and 9.5%, respectively, of annual production from the gulf.
The Louisiana Office of Conservation said production of 889 MMcfd of natural gas has resumed onshore and in state waters in 38 parishes, but 46.3% of the wells in that region remain shut-in.
The US Department of Energy reported 1 million b/d of refining capacity remains shut down along the Gulf Coast. It said several natural gas processing plants in Louisiana and Texas with an aggregate capacity of 8.11 bcfd are still inoperable. Other plants with a total capacity of 1.35 bcfd are operational but remain inactive because of upstream or downstream infrastructure problems or unavailable supplies.
TransMontaigne Partners LP, a petroleum products terminaling and pipeline company based in Denver, said a preliminary assessment revealed no significant damage from Hurricane Wilma to its terminal facilities at Port Everglades and Fisher Island in Florida. However, both locations are without power, and the respective ports are closed to navigation. Officials estimated that product will be available for lifting "within the next couple of days."
Distillate stocks decline
US distillate fuel inventories fell by 1.6 million bbl to 121.1 million bbl in the week ended Oct. 21, with both diesel fuel and heating oil down, the US Energy Information Administration reported Oct. 26. Commercial US crude inventories jumped by 4.4 million bbl to 316.4 million bbl in the same period, however. Gasoline stocks inched up by 200,000 to 195.9 million bbl.
Imports of crude into the US increased by 750,000 b/d to nearly 10 million b/d in the same week. Over the last 4 weeks, crude imports have averaged nearly 9 million b/d, a decline of 1.2 million b/d from the same period a year ago, IEA reported.
Crude input into US refineries increased by 311,000 b/d to 13.6 million b/d in the latest period. Refineries operated at 80.7% of capacity as some Gulf Coast units came back on stream.
The November natural gas contract shot up by $1.33 to $14.34/MMbtu Oct. 25 on the New York Mercantile Exchange, aided by a strong natural gas spot market, short covering by traders with exposed sales contracts, and a strong rally in the crude market, said Enerfax Daily analysts.
Heating oil for November delivery escalated by 9.26¢ to $1.89/gal, while gasoline for the same month gained 7.22¢ to $1.65/gal. The December contract for benchmark US light, sweet crudes jumped by $2.12 to $62.44/bbl on NYMEX. The January position advanced by $2.27 to $62.82/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., increased by $1.92 to $63.05/bbl.
In London, the December contract for North Sea Brent crude gained $2 to $60.24/bbl on the International Petroleum Exchange. Gas oil for November was up by $12.50 to $570.25/tonne.
The Vienna headquarters of the Organization of Petroleum Exporting Countries was closed for a holiday Oct. 26, so there was no update on the average price for OPEC's basket of 11 benchmark crudes.
Contact Sam Fletcher at [email protected].