Energy Prices Continue To Soar As Katrina Impact Is Assessed
Crude Oil hit another record-high today as
the damage reports from hurricane Katrina poured in.
Up to 90% of output from the Gulf Of Mexico remained closed today and the
uncertainty surrounding how extensive the damage is and just how long it will
take to get back online drove crude oil prices as high as $70.85. The region
supplies approximately 25% of all US energy and is home to nearly 10% of US
refinery capacity.
An Energy Department spokesman revealed that at least one US
refiner has asked for a loan of crude oil from the Strategic Petroleum Reserve.
The spokesman refused to reveal the company or the amount of crude oil requested
but said the request is under review. The Minerals Management Service, which
manages offshore resources, announced that 8.3 billion cubic feet of natural gas
output was lost yesterday. That figure represents 83% of total output for the
Gulf region.
Two offshore-drilling companies reported that submersible rigs
broke their moorings and are adrift in the Gulf, clogging sea lanes off the
coast of Louisiana and Mississippi. Among the rigs adrift are Deepwater
Nautilus, owned by Transocean
(
RIG |
Quote |
Chart |
News |
PowerRating) and Ocean Voyager, owned by
Offshore Drilling
(
DO |
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Chart |
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PowerRating). Offshore Drilling has been unable to locate the
Ocean Warwick, a jack-up rig facility.
October Crude Oil +3.88%, Harbor Unleaded Gas
+11.83%, Natural Gas +4.67% and Heating Oil +7.80% all closed
significantly higher. Natural Gas and Heating Oil were both highlighted in the
TradingMarkets Momentum 5 list last night.
The Commerce Department reported Factory Orders decreased by
-1.9% in July. The decline was smaller than forecast but nonetheless the largest
fall in 15-months (Full Report).
Meanwhile the Conference Board reported that Consumer
Confidence rose in August after falling in July. The index now stands at 105.6
from 103.6 last month and beat analyst expectations. Click
here
for today’s report.
The Federal Reserve Open Market Committee released the minutes
of their August 9 meeting today. The
report
showed that the FOMC is becoming increasingly concerned about inflation, not
growth. The news had little impact on the bond markets, which seemed to focus
more on the damage reports from hurricane Katrina. US treasuries rose across the
curve as investors moved sought the safety of bonds. 10yr T-Note +0.64%,
5yr T-Note +0.51% and 2yr T-Note +0.24%.
In the currency market, the Japanese Yen had its drop in over
a month vs. the US Dollar after two government reports revealed disappointing
consumer spending and retail sales (Full
Story).
The dollar rally continued to push the price of Gold -1.34%
and Silver -0.44% lower. Gold hit a 1-month low, while Silver made a 6-month
low. Platinum -1.70 and Palladium -0.95% also closed lower. Copper +1.57% was
the only metal to close higher.
The Coffee market is eagerly anticipating the latest Warehouse
Data from New Orleans amid stories that 100,000 bags of coffee have been lost.
December Coffee +2.56% closed higher. Cotton +2.32% and Sugar
+3.05% also rose but Cocoa -1.61% closed lower. Lumber -0.17% gave
back its early gains to close flat after yesterday’s limit up session.
The grains were mixed, Soybeans +0.83% closed higher
while Wheat -0.92% and Corn -0.46% closed lower.
Economic News
Store Sales:
W/W Change – Actual -0.3%
Consumer Confidence:
Actual 105.6 Consensus 100.0
Factory Orders:
M/M Change – Actual -1.9% Consensus -2.3%
Ashton Dorkins