NEW YORK (Dow Jones News) – Gasoline futures prices jumped nearly 2 percent Monday on the New York Mercantile Exchange amid growing concern that Hurricane Isabel may strike the East Coast and affectrefinery operations or imports.
Crude oil futures fell 0.5 percent, however, continuing their down trend as supply concerns have eased with the passing of the summer driving season and the winter heating season yet to get under way.
Forecasters said Isabel could hit anywhere from North Carolina to New Jersey late Thursday or early Friday with sustained winds of up to 130 mph. The storm is forecast to reach the North Carolina coast early Thursday and be near the Washington, D.C., area by early Friday.
“There’s also a little bit of concern that the storm, if it takes a bit of a track north, could disrupt the New York harbor somewhat,” said Phil Flynn, analyst with Alaron Trading Corp. in Chicago. “That’s one of the reasons we’re up so much. The storm track could disrupt gasoline imports, and activity in the New York harbor.”
After trading as high as 86.50 cents a gallon, October gasoline futures settled up 1.41 cent, or 1.6 percent, at 85.93 cents a gallon.
“We’re seeing a lot of demand because of Isabel,” said Ed Silliere, a trader at Energy Merchant, a supplier of gasoline and heating oil to independent distributors. “Gas stations don’t want to have empty tanks if there’s going to be flooding, so they’re topping them off.”
October light, sweet crude futures settled down 13 cents on the Nymex at $28.14 a barrel, in the middle of the day’s range. Front-month Nymex crude futures have fallen 11 percent so far this month, as the late-August spike in gasoline futures fizzled with the close of the summer driving season. On London’s International Petroleum Exchange, October Brent blend futures settled down 7 cents at $26.70 a barrel.
Mike Fitzpatrick, an analyst at Fimat USA, said worries about tight crude supplies, prevalent over the summer, appear to be easing.
Commodity and hedge funds have been selling down their crude positions over the past week, said Tom Bentz, futures analyst with BNP Paribas.
“The market is still in the downtrend that we’ve been in for the last week and a half,” Bentz said. “Since it’s broken down, it’s having trouble rising back up. Supply fears seem to have eased.”
At least nine East Coast refineries have the potential to be affected by the hurricane, including three in New Jersey, four in Pennsylvania, one in Delaware and one in Virginia.
The hurricane could be a problem, said Bill O’Grady, analyst at A.G. Edwards. But he suggested heating oil futures should have gained with gasoline, since the same refineries make both products.
October heating oil futures followed crude futures on the Nymex, settling down 0.7 cent at 74.70 cents a gallon. Natural gas for October delivery fell 8.1 cents to close at $4.685 per 1,000 cubic feet.
