Hurricane Rita Upgraded To Category 5 Storm
Energy prices rallied
as Hurricane Rita gained strength and moved past the Florida Keys, heading
towards the Gulf of Mexico and Texas. The National
Hurricane Center upgraded Rita to a category-5 storm, with winds up to 165mph (full
report). The latest
strike probabilities chart shows exactly why so many platforms and rigs are
being evacuated.
The latest Minerals Management Service
report showed 333 platforms and 54 rigs were evacuated since yesterday. In total
460 platforms and 69 rigs have been evacuated so far. These evacuations are
equivalent to 57.26% of 819 manned platforms and 51.49% of 134 rigs currently
operating in the Gulf of Mexico. This shut-in oil production is equivalent to
73.16% of the daily oil production and shut-in gas production is equivalent to
47.13% of the daily gas production (MMS
report).
Exxon-Mobil
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PowerRating), Chevron
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PowerRating),
Conoco Phillips
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Kerr-McGee
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PowerRating) were among the producers to close facilities and evacuate
workers.
As if that weren’t enough traders also had
to contend with the
EIA weekly petroleum report which showed crude oil inventories fell by -0.3
M barrels, while gasoline inventories rose 3.4 M barrels.
Crude Oil +0.91%, Harbor
Unleaded Gasoline +2.40%, Heating Oil +0.96 and Natural Gas
+0.80% all closed higher.
Treasury prices rallied sharply
10yr T-Note +0.35%, 5yr T-Note +0.15% and 2yr T-Note +0.05%.
The softs mixed again. Cotton
+2.63%, Lumber +2.38% and Frozen Orange Juice +0.62% rallied.
Sugar -2.42%, Cocoa -1.60% and Coffee -1.51% declined.
All the grains closed higher.
Wheat +1.25%, Soybeans +1.01% and Corn +0.12%.
Pork Bellies +0.60% closed higher but all
the other livestock contracts closed lower. Lean Hogs -1.47%, Live Cattle -0.37%
and Feeder Cattle -0.33%.
The whole metals complex closed higher, led by Copper
+2.43% which hit a 5-week high in New York after COMEX reported inventories
fell. The report conflicts with an earlier one released by the LME that showed
inventories rose for the 7th consecutive day. Gold +0.55% continued to
display its recent strength, currently trading at a 17-year high, mainly due to
inflation worries. Silver +0.54%, Palladium +0.30% and Platinum
+0.27%.
Economic News
MBA Purchase Applications:
Purchase Index – Actual 500.3
EIA Petroleum Status Report:
Crude Oil Inventories – Actual -0.3 M Barrels
Ashton Dorkins