Tropical Storm Gustav Rocks Oil Prices
08/29/08 - 03:28 PM EDT
Chuck Marvin
Energy futures gained ground most of the day but ended with a slight loss at the New York Mercantile Exchange Friday. Fueling the volatile session were clashing forecasts surrounding the future trajectory of Tropical Storm Gustav and the serious possibility that the storm could carve a path through the dense oil and gas fields in the Gulf of Mexico and onshore refineries in Mississippi, Louisiana and Texas.
West Texas crude for October delivery climbed above $118 during the session but ended the session down 13 cents at $115.46 a barrel, and front-month natural gas ended just above even at $7.14 per million British thermal units. Gustav is still at least three days away from making landfall in the continental U.S., and the trail it will blaze between now and then is far from certain. However, two alarming attributes of Gustav are now all but guaranteed: the storm will almost certainly make landfall somewhere along the U.S. coastline along the Gulf of Mexico and it will most likely be upgraded to hurricane status before it does so. Forecasts from energy analysts and weather forecasters concerning Gustav's path and the threat it poses to offshore rigs and onshore refineries are widely scattered. Some analysts say that the statistical likelihood that Gustav will score a bull's eye with a major energy installation are slim to none, and that any real risks that Gustav poses to energy markets have already been priced into the energy futures market.
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