Updated from 2:36 PM EDTEnergy prices finished mixed Wednesday as traders reacted to new indications that worldwide oil demand remains firm. Light, sweet crude for November delivery closed up 59 cents to $64.12 a barrel. Heating oil fell 0.22 cent to end at $2.01 a gallon. Natural gas was flat at $13.52 per million British thermal units, while gasoline was down 0.56 cent to $1.83 a gallon. The Energy Department's Energy Information Agency said Wednesday that Hurricanes Katrina and Rita have strained already-tight natural gas and petroleum products markets just as the heating season is about to begin. The agency said prices for petroleum and natural gas will remain high because of losses caused by the hurricanes and tight international supplies of crude oil. This follows the International Energy Agency's warning that a current dip in energy demand is temporary. Among other things, it cited growing demand in China and the ability of U.S. refineries to recover from the impact of Hurricanes Katrina and Rita. "It is the expectations of a demand rebound that are causing prices to rise," said Michael Fitzpatrick, energy analyst at Fimat USA. In addition, Fitzpatrick said traders were waiting on the Energy Department's weekly petroleum status report, which is due on Thursday, for "the next directional clue.' "We want to see the utilization rates to see how quickly production rates have returned," he said. The EIA said in its short-term energy outlook that households heated primarily with natural gas are expected to spend $350, or 48%, more on fuel this winter than last year. Households heating primarily with oil can expect to pay an average of $378, or 32%, more, while households heating primarily with electricity can expect to pay an average of $38, or 5%, more. Households heating primarily with propane are projected to pay on average $325, or 30%, more this winter. "Should colder weather prevail," the report warned, "expenditures will be significantly higher." The report says total U.S. energy demand is projected to decline in the third and fourth quarters due to hurricane-related destruction and higher prices. Total energy demand is projected to increase 0.3% between 2004 and 2005, compared with 1.5% from 2003 to 2004. But demand growth is projected to rebound in 2006, the report said. In the latest on the Gulf of Mexico situation, the U.S. Minerals Management said Wednesday that shut-in oil production in the Gulf of Mexico was about 1 million barrels of oil a day, the equivalent of 69.8% of the gulf's daily oil production. The shut-in gas production is 5.9 billion cubic feet per day, the equivalent of 59.2% of the gulf's daily gas production. The Amex Oil Index was down 1.59%, while the Philadelphia Oil Sector Index was down 2.08%. Shares of most major companies, including Chevron ( CVX - Get Report), Marathon ( MRO - Get Report), and ExxonMobil ( XOM - Get Report), were down in late trading. In company news, Fitch Ratings said late Tuesday that it had revised its rating of ConocoPhillips ( COP - Get Report) to positive, citing the company's continued debt reduction and the free cash flow the company has generated and reinvested in its businesses. National Fuel Gas ( NFG - Get Report)said its Empire State Pipeline unit filed an application with the Federal Energy Regulatory Commission to build and operate the Empire Connector, which would run from an existing line near Rochester, N.Y. to connect with the Millennium Pipeline near Corning, N.Y. The Williamsville, N.Y.-based company said the project would cost about $144 million.
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