Market watch: US gasoline concerns boost energy futures prices

Concerns over US gasoline supplies helped spur futures prices for oil and refined products Friday after officials of Citgo Petroleum Corp. said it could take 6 months, rather than 6 weeks, to repair damage to their 158,650 b/d Lemont, Ill., refinery.

By the OGJ Online Staff

HOUSTON, Aug. 27 -- Concerns over US gasoline supplies helped spur futures prices for oil and refined products Friday after officials of Citgo Petroleum Corp. said it could take 6 months, rather than 6 weeks, to repair damage to their 158,650 b/d Lemont, Ill., refinery.

A distillation tower at the refinery's crude unit suffered a structural failure Aug. 17 as a result of conditions present after an Aug. 14 fire, company officials said (OGJ Online, Aug. 24, 2001). They asked the US Department of Energy and the Environmental Protection Agency to help ease the gasoline supply situation primarily in the Chicago and Milwaukee markets.

Rural Midwest residents also are facing peak demand for gasoline and agricultural diesel during the pending harvest season. Government authorities have not yet indicated what they might do, however, if supplies are curtailed dramatically or prices jump.

On the New York Mercantile Exchange, unleaded gasoline for September delivery bumped up 4.63¢ to 83.57¢/gal, with traders already anticipating peak demand over the extended Labor Day weekend Sept. 1-3. Home heating oil for the same month also increased 0.88¢ to 74.6¢/gal, as rumors circulated of problems at other refineries.

The October contract for benchmark US light, sweet crude rose 27¢ to $26.90/bbl, while the November contract gained 31¢ to $26.91/bbl.

However, the September contract for natural gas fell 10.5¢ to $2.71/Mcf on the NYMEX.

In London, the October contract for North Sea Brent oil was up 35¢ to $25.95/bbl on the International Petroleum Exchange. The September contract for natural gas also gained 1.9¢ to the equivalent of $2.59/Mcf on the IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes climbed 67¢ to $24.69/bbl Friday.

More in Refining