MARKET WATCHRelief from storms lowers energy prices

July 15, 2005
Energy prices plummeted July 14 amid a quick rebound of offshore oil and natural gas operations from Hurricane Dennis and indications that Hurricane Emily may not threaten offshore facilities or refineries along the Texas Gulf Coast.

By OGJ editors

HOUSTON, July 15 -- Energy prices plummeted July 14 amid a quick rebound of offshore oil and natural gas operations from Hurricane Dennis and indications that Hurricane Emily may not threaten offshore facilities or refineries along the Texas Gulf Coast.

Emily strengthened into a category 4 hurricane July 15 about 345 miles south-southeast of Port-au-Prince, Haiti, moving west-northwest at 20 mph. It is expected to hit Mexico's Yucatan peninsula by July 25 and to enter the Gulf of Mexico the next day. The storm then is expected to target the Mexican mainland or South Texas, missing the concentration of offshore facilities and refineries along the Texas Coast but possibly threatening Mexican oil and gas operations in the Bay of Campeche.

Meanwhile, the US Minerals Management Service said July 14 that workers had returned to all the rigs and platforms in the Gulf of Mexico that were evacuated ahead of Hurricane Dennis. Only 54,431 b/d of oil and 268.3 MMcfd remained shut in, officials reported. However, the cumulative production lost through July 8-14 because of the storm totaled 5.3 million bbl of oil and 23.2 bcf of natural gas, MMS reported.

Energy prices
The August contract for benchmark US light, sweet crudes plunged by $2.21 to $57.80/bbl on July 14, the lowest level since June 30 on the New York Mercantile Exchange. The September contract lost $2.15 to $58.70/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by $2.21 to $57.81/bbl. Heating oil for August delivery fell by 6.1¢ to $1.66/gal on NYMEX. Gasoline for the same month dropped 6.07¢ to $1.69/gal.

The August natural gas contract declined by 5.6¢ to $7.84/MMbtu on NYMEX, dipping after the Energy Information Administration reported the injection of 94 bcf of natural gas into US underground natural gas storage during the week ended July 8 (OGJ Online, July 14). However, the contract partially recovered during the rest of the session to close at a somewhat higher level, said analysts at Enerfax Daily.

In London, the expiring August contract for North Sea Brent crude lost 96¢ to $57.80/bbl on the International Petroleum Exchange.

The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes fell by $1.16 to $53.37/bbl July 14.