Fuel prices continued to climb back up as traders charged like bulls in Spain, driving prices for light sweet crude on the August contract in New York hit $61.25 before settling at $60.62 for the evening. Surprisingly enough, traders suspect U.S. inventories may be down somewhat when the EIA makes its announcement in the morning.
Heating oil also climbed from the opening bell price of $1.70 to $1.75. Gasoline traded up opening at 1.75 and going to $1.79 before settling at $1.78.
The anticipated drops in inventories come from productions cuts made as a result of hard-hitting storms whipping through the Gulf of Mexico. No real damage was done and crews have already returned to platforms and are in the process of restarting pumps to resume production. This may be a brief restart however.
Markets, having dropped slightly as assessments came in on the conditions of oilrigs, reports of a new storm, tropical storm Emily came in. Right now, the lady is a few hundred miles from Barbados but is making a beeline to the Caribbean. They expect the storm to approach the U.S. coastlines sometime early next week and although the exact path is far from certain, many forecasts have this baby heading for a nice Gulf vacation. Unfortunately, the traders heard this information and promptly began the running of the bulls once again.
“Just as you start to take the storm premium out, you may have to once again put it back in,” said Phil Flynn, a broker for Alaron Trading Corp., told the AP. “These are difficult markets, as a slight change in the track of these storms or a change in their strength could determine whether we continue to fall or whether we continue to rally back up.”
Last week, the reports were mostly positive in that distillate inventories climbed much higher than surveys anticipate. Crude oil inventories dropped and gasoline dipped slightly. Refineries have been running at 98% capacity. As some of the refining operations were on the Gulf Coast, once again, traders are somewhat unsure of the inventories.
One final note, BP reported their Thunder Horse platform in the Gulf of Mexico was listing about 20 to 30 degrees. The platform, not yet pumping oil, would offer the largest volume in the Americas, cranking out 250,000 barrels a day at capacity and 5.7 million cubic meters of natural gas. BP said it’s too early to tell whether or not this will delay the opening at the end of this year. No casualties or spills have been reported.
John Stith is a staff writer for Murdok covering technology and business.
