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Gasoline futures surge to record high after katrina { August 31 2005 } Original Source Link: (May no longer be active)
http://news.ft.com/cms/s/765c4bae-1a0b-11da-b279-00000e2511c8.htmlhttp://news.ft.com/cms/s/765c4bae-1a0b-11da-b279-00000e2511c8.html
Gasoline futures surge to record high
By Chris Flood
Published: August 31 2005 11:48 | Last updated: August 31 2005 20:34
US gasoline futures surged to a record high on Wednesday after the Department of Energy reported a 500,000 barrel drop in gasoline inventories to 194.4m barrels as stocks fell for a ninth week in succession.
The September Nymex gasoline contract rose 17.2 per cent to $2.90, its highest level since opening in 1984.
“US gasoline prices are now in the process of the most dramatic spike ever seen,” said Kevin Norrish, analyst at Barclays Capital.
The inventory data covered the week to August 26 and does not reflect the impact of Hurricane Katrina. Although the US government attempted to calm the market by saying it would tap the strategic petroleum reserve, this move was seen as largely ineffective after the disruption to refining capacity caused by Katrina.
Traders fear gasoline prices could spike higher, as Katrina has left nine refineries idle and four operating at reduced rates. Analysts said reduced refinery output would present a major problem, with estimates of losses of between 20m and 40m barrels of refinery throughput.
Crude oil prices continued to trade close to record highs after a larger than expected decline in crude inventories of 1.5m barrels to 321.4m.
The October West Texas Intermediate contract traded at $68.94 a barrel, a loss of 87 cents, but IPE Brent for October delivery moved 55 cents lower to $67.02.
US heating oil prices also pushed to a new record high, with September Nymex heating oil futures trading at $2.0749 a gallon from the previous record of $2.06 set on Tuesday. US natural gas prices moved higher, with October Nymex henry hub up 3.6 per cent to $12.08 per million British thermal units from $11.659 on Tuesday.
Coffee prices are expected to rise amid fears that 8 per cent of global coffee supply could be disrupted. In London, the November robusta coffee contract hit $1,005 per tonne before settling 2.4 per cent up at $975 per tonne.
Traders also remained concerned about disruption to US soft commodity production by Katrina. The December cotton futures price eased 9 cents to $50.19/lb after reaching a 3-week high on Tuesday.
Gold prices rose to $434.20/$434.50 a troy ounce in London, helped by Japanese buying, from $429.80/$431.60. Traders said the key issue was whether gold would hold above the support level of $430 if funds continue to liquidate long positions.
Goldman Sachs upwardly revised its forecast for copper prices next year, with the benchmark three month copper price expected to average $2,785 per tonne in 2006, almost a 15 per cent increase on its previous forecast of $2,425 per tonne.
In London, the benchmark three-month copper price traded $10 lower at $3,637 per tonne.
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