Market watch: NYMEX gas price stays above $4/Mcf
Natural gas futures prices continued their climb above the $4/Mcf mark on the New York Mercantile Exchange Monday on concerns about Hurricane Lili.
By OGJ editors
HOUSTON, Oct. 1 -- Natural gas futures prices continued their climb above the $4/Mcf mark on the New York Mercantile Exchange Monday on concerns about Hurricane Lili, which is expected to cross the Gulf of Mexico later this week.
It will be the second storm in as many weeks. Lili is expected to make landfall in Texas, Louisiana, or Mississippi by Thursday or Friday, the National Hurricane Center in Miami said.
With maximum sustained winds of 85 mph, the storm's eye was over Cuba's Isle of Youth early Tuesday, and about 60 miles southeast of Cabo Frances in western Cuba.
Lili, the fourth hurricane of the Atlantic season, was moving northwest at about 13 mph and was expected to make a direct hit on western Cuba around noon, the Cuban Institute of Meteorology said.
Last week, Tropical Storm Isadore made landfall in Louisiana. Storm-related disruptions of Gulf of Mexico oil production and crude and products imports into gulf ports are expected to result in a strong draw on US crude and products stocks this week, putting upward pressure on prices (OGJ Online, Sept. 30, 2002).
The November natural gas contract settled at $4.04/Mcf Friday on the NYMEX, breaking the near-term $4/Mcf price for the first time in 15 months. On Monday, it gained 9.7¢ to $4.14/Mcf. The December position also was up 13.1¢ to $4.25/Mcf.
"While natural gas traders appear to be reacting early on, we may see some spill-over concerns in the refined product markets on worries of refinery outages," said Michael Rothman, senior energy market specialist, with Merrill Lynch Inc. in New York.
Regarding world oil prices, Rothman said traders await news from the talks in Vienna between United Nations weapons inspectors and Iraqi officials on the inspectors' possible return to Iraq. These talks possibly could avert military force against Iraq as outlined in a US-UK resolution to the UN.
"For the oil markets, the inspection issue has left traders a bit weary at this point given the evident resistance to the hawkish US position," Rothman said. He referred to resistance from France, Russia, and possibly China. These three countries are UN Security Council permanent members with veto powers. China had made implications that it might abstain from vetoing if it comes to that.
The November contract for benchmark US light, sweet crudes Monday slipped by 9¢ to $30.45/bbl on NYMEX, while the December position dipped by 7¢ to $30.21/bbl.
Unleaded gasoline for October delivery lost 0.08¢ to 81.35¢/gal, and heating oil for the same month slipped by 0.20¢ to 80.18¢/gal. For November delivery, unleaded gasoline lost 0.28¢ to 80.54¢/gal, and heating oil lost 0.56¢ to 80.77¢/gal
In London, the November contract for North Sea Brent oil dropped 13¢ to $28.75/bbl on the International Petroleum exchange. Traders blamed the decline largely on profit-taking related selling.
The November natural gas contract lost 3.3¢ to the equivalent of $3.32/Mcf Monday on IPE.
The average price for OPEC's basket of seven benchmark crudes increased Friday by 5¢ to $28.22/bbl. The OPEC basket price gained 12¢ Monday to $28.34/bbl.