Sam Fletcher
Senior Writer
HOUSTON, May 17 -- Pressured by a strengthening dollar and reports of higher US crude inventories and lower Chinese demand, energy prices resumed their downward slide on May 16 after a brief upturn in May 13 trading.
Meanwhile, meteorologists at the National Oceanic and Atmospheric Administration said the upcoming June 1-Nov. 30 US hurricane season could be just as active as last year when Hurricanes Charley, Frances, Ivan, and Jeanne struck Florida within a 6-week period. Ivan alone caused the most damage ever to the US offshore oil and natural gas industry, destroying 7 platforms and damaging 24 other platforms and 102 pipelines in the Gulf of Mexico. It also interrupted more than 10% of the gulf's oil and gas production for at least 4 months, contributing to higher commodity prices, said the US Minerals Management Service.
NOAA expects 12-15 tropical storms in the Atlantic and Caribbean this season, with 7-9 of those storms developing into hurricanes, including 3-5 major hurricanes with winds exceeding 110 mph. Last year saw 15 tropical storms, of which 9 became hurricanes with winds of 74 mph or more.
Energy prices
The June contract for benchmark US sweet, light crudes closed at $48.61/bbl, down by 6¢, after trading as low as $47.60/bbl May 16 on the New York Mercantile Exchange. The June contract lost 11¢ to $50.17/bbl, with other months priced increasingly higher through December in a contango situation that encourages stock building. On the US spot market, West Texas Intermediate at Cushing, Okla., declined by 5¢ to $48.62/bbl. Heating oil for June delivery dropped 2¢ to $1.35/gal on NYMEX. Gasoline for the same month was down by 0.7¢ to $1.41/gal.
The June natural gas contract dropped by 9¢ to $6.45/MMbtu on NYMEX. "Despite warmer weather in Texas later this week, temperatures in the Northeast and Midwest are expected to remain slightly below normal through next week," said analysts at Enerfax Daily.
In London, the June contract for North Sea Brent crude fell by 61¢ to $48.05/bbl on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes dipped by 7¢ to $45.47/bbl on May 16. So far this year, OPEC's basket price has averaged $45.60/bbl.
Contact Sam Fletcher at [email protected]
