Updated from 11:57 am EDT
Energy futures were weaker again Thursday as traders continued to weigh a government survey signaling rising imports and lower demand for gasoline.
The November crude oil contract lost $1.43 to $61.36 a barrel in Nymex trading, its cheapest point in two months. Unleaded gasoline futures slipped 7 cents to $1.84 a gallon. Heating oil fell about 6 cents to $1.95 a gallon.
"Crude stocks are starting to build as expected," said Mary Novak, managing director of energy services at Global Insight. "But refined products are being drawn down, particularly diesel and home heating oil. The good thing is we're going in to October with
inventories at record levels, so right now it's not an issue."
Over the last four weeks, gasoline demand has averaged almost 8.8 million barrels a day, or 2.6% below the same period last year, the Energy Department said Wednesday. Distillate fuel demand has averaged 3.9 million barrels a day in the last month, down 3.8% from a year ago.
Energy Secretary Samuel Bodman warned on Wednesday that the damage caused by Hurricanes Katrina and Rita could keep energy costs higher for years to come.
Refineries, closed as Hurricanes Katrina and Rita came through the Gulf of Mexico, operated at 69.8% of their capacity last week. Novak said that when refineries come back on line they'll have to work to make up for the losses.
"There's been too much damage to the infrastructure," she said. "Going into 2006, refined products will be at low levels. Refineries are going to have run full out."
The Minerals Management Service said Thursday's shut-in oil production was about 1.2 million barrels a day, the equivalent of around 80.2% of the Gulf of Mexico's daily output. Shuttered gas production was equal to 66.3% of the daily total.
said it has successfully begun the startup procedures for its refinery at Pascagoula, Miss., which was closed before Hurricane Katrina. The refinery could return to normal operations by the end of the month, ahead of previous estimates, Chevron said. Shares of Chevron were down $2.09, or 3.4%, to $59.95.
The refinery produces 325,000 barrels a day of refined products. Chevron has completed an assessment of how the hurricanes affected its Gulf of Mexico offshore facilities, and said about 20% of the company's net production in the region has been restored.
A number of production facilities sustained damage and 14 structures were toppled by the severe weather.
estimated that oil and natural gas production available for sale in the third quarter will be around 318,000 barrels of oil equivalent a day, below the previous guidance of 322,000 to 342,000 barrels. Around 20,000 barrels were deferred in the quarter because of hurricane-related downtime in the Gulf.
The company expects to actually sell about 289,000 barrels a day in the third quarter. Currently, Marathon's Gulf of Mexico production amounts to about 32,000 barrels of equivalent a day, and output of around 28,000 barrels remains shut down because of storm damage.
said its energy division has completed two acquisitions designed to augment its Cherokee Basin gas project in Kansas.
The company bought Colt Natural Gas, and separately Layne purchased an additional 75,000 leased acres in the Cherokee Basin from an oil and gas exploration company that it didn't name.
said it will spin off its chemical business Tronox through an initial public offering. After the IPO, planned for the fourth quarter, Kerr-McGee will continue to hold an interest in Tronox. The Oklahoma City-based energy company expects to then distribute those shares to its stockholders in 2006.
Enterprise Products Partners
, a Houston-based energy company, said it didn't see any major damage from the two hurricanes. The company doesn't expect a material financial effect from the storms and said most of its affected facilities have restarted operations.