Energy and Treasury prices fall sharply as Rita is downgraded
Oil and Gas futures
came tumbling down on NYMEX as hurricane Rita was downgraded to a category-3
hurricane. The latest public advisory issued by the
National Hurricane Center warns “Rita is still expected to come ashore as a
dangerous hurricane” with winds currently at 125mph (full
report).
However, Rita is causing a substantial
disruption to production in the Gulf of Mexico as the latest figures from the
Minerals Management Service show (click
here). 77.41% of 819 manned platforms and 67.16% of 134 rigs have been
evacuated. Today’s shut-in oil production is equivalent to 99.125% of the daily
oil production. Shut-in gas production is equivalent to 72.04% of the daily gas
production.
The cumulative shut-in oil production for
the period 8/26/05-9/23/05 is 30,280,661 bbls, which is equivalent to 5.531 % of
the yearly production of oil in the Gulf of Mexico (approximately 547.5 million
barrels). The cumulative shut-in gas production 8/26/05-9/23/05 is 140.502 BCF,
which is equivalent to 3.49% of the yearly production (approximately 3.65 TCF).
Heating Oil -3.91% was the biggest
percentage decliner, followed by Crude Oil
-3.47%, Natural Gas -2.97% and Harbor
Unleaded Gasoline -2.15%.
Treasury prices driven lower by falling
energy prices,
10yr T-Note -.051%, 5yr T-Note -0.36% and 2yr T-Note -0.14%.
The US Dollar rallied, with the Dollar
Index +0.70%, helping push metals prices lower. Gold -0.66%,
Silver -1.08%, Copper -0.67%, Palladium -0.87 and Platinum
-0.32% all closed lower.
The softs continued the recent mixed
performance, Cotton -1.85%, Frozen Orange Juice +0.91%, Cocoa
+0.82% and Coffee -1.40%, Sugar -0.19%. Once again Lumber +3.27%
was the exception, closing limit up for the second consecutive day as demand is
expected to rise once Rita has passed.
The grains were also mixed. Among the
larger contracts
Wheat +0.38% was the only one to rise, Soybeans -0.95% and Corn
-0.48% fell.
Livestock was higher across the board, Pork Bellies +2.34%
Lean Hogs +1.21%, Live Cattle +0.42%
and Feeder Cattle +0.13%.
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Ashton Dorkins