Oil And Gas Futures Rally Following Government Reports
Oil and Gas futures
rallied on NYMEX following two Government reports that showed crude oil
inventories declined sharply and production in the Gulf of Mexico remained completely shut-in.
Today’s report by the
Minerals Management
Service showed a deterioration in gas production, while oil production
remained completely offline in the Gulf of Mexico. Shut-in oil production is
equivalent to 100% of the daily oil production, approximately 1.5 million BOPD.
Today’s shut-in gas production is equivalent to 80.27% of the daily gas
production, approximately 10 BCFPD.
The weekly
EIA report showed that crude oil inventories recorded another drop in the
latest week, adding to a recent string of declines. However, stocks of gasoline
advanced again during the period, adding to the surprise gain they posted in the
previous week. Crude oil inventories dropped by 2.4 million barrels for the week
ended September 23, falling to 305.7 million barrels from the 308.1 million
barrels recorded in the previous week. This followed a decline of 300,000
barrels for the prior week. Even with the recent declines, oil inventories
remain 11.4% higher than their levels of the same time last year.
Gasoline inventories posted a
week-over-week advance of 4.4 million barrels, adding to the 3.4-million-barrel
gain posted in the prior week. Gasoline stocks are now only 2.9% below their
levels of last year. Inventories of distillate fuel oil fell by 500,000 barrels
for the most recent week.
The Commerce Department released its
report on Durable Goods Orders
in the month of August, showing much better than expected growth. However, the
data does not include the impact of Hurricane Katrina.
The report showed that durable goods
orders rose by 3.3 percent in August following a downwardly revised 5.3 percent
decrease in July. Economists had been expecting orders to increase by a more
modest 1.0 percent compared to the 4.9 percent drop originally reported for
July.
The growth in durable goods orders was
partly due to a significant increase in orders for computers and electronics
products, which rose 5.5 percent in August after falling 6.5 percent in July.
Orders for primary metals, fabricated metal products, machinery, and
transportation equipment also had significant increases.
The Commerce Department also noted that
excluding orders for transportation equipment, orders rose 4.2 percent in August
after falling 3.7 percent in July. Orders for transportation equipment rose 1.4
percent in July following an 8.7 percent decrease in July.
Mortgage application volume dropped in the
most recent week, led by a sharp decline in refinance activity.
The
Mortgage Bankers Association revealed that its market composite index of
mortgage loan application volume decreased by a seasonally-adjusted 6.6% for the
week ended September 23, dropping to 721.2 from the 772.2 recorded in the
previous week. This more than reversed a 1.5% advance recorded in the previous
week. The 4-week moving average for the market index ticked down by 0.1%.
Following a 7% advance in the previous
week, the MBA’s refinance index showed a 10.5% decline for the week ended
September 23. The organization said its purchase index declined by 3.4%, adding
to the prior week’s 2.6% slide. The share of mortgage activity made up by
refinancing fell to 43.9%, the MBA reported, compared to 45.6% in the previous
week.
Reuters/Jefferies CRB Index Movers
| Commodity (symbol) |
Price | Price Change | % Change |
| Corn (C) | 203.25 | +1.00 | +0.49 |
| Soybeans (S) | 562.75 | +5.25 | +0.94 |
| Wheat (W) | 328.75 | +1.75 | +0.54 |
| Live Cattle (LC) | 88.72 | -0.35 | -0.39 |
| Lean Hogs (LH) | 63.10 | +0.83 | +1.32 |
| Platinum (PL) | 925.80 | +4.90 | +0.53 |
| Gold (GC) | 473.10 | +6.90 | +1.48 |
| Silver (SI) | 740.30 | +7.50 | +1.02 |
| Copper (HG) | 174.80 | +2.00 | +1.16 |
| Cocoa (CC) | 1373.00 | +22.00 | +1.63 |
| Coffee (KC) | 92.90 | +4.75 | +5.39 |
| Sugar #11 (SB) | 11.25 | +0.18 | +1.63 |
| Cotton (CT) | 53.91 | -0.18 | -0.33 |
| Orange Juice (JO) | 100.45 | -0.65 | -0.64 |
| Crude Oil (CL) | 66.25 | +1.18 | +1.81 |
| Heating Oil (HO) | 217.00 | +7.60 | +3.63 |
| Natural Gas (NG) | 14.00 | +0.88 | +6.71 |
Economic News
MBA Purchase Applications:
Purchase Index – Actual 483.1
Durable Goods Orders:
New Orders, M/M Change – Actual 3.3% Consensus 1.0%
EIA Petroleum Status Report:
Crude Oil Inventories, W/W Change – Actual -2.4 M Barrels
Gasoline Inventories, W/W Change – Actual +4.4 M Barrels
Ashton Dorkins