The IKE Factor-Gas Up!Natural Gas Futures Rise as Hurricane Ike Heads for Texas Coast
By Reg Curren
Sept. 12 (Bloomberg) -- Natural gas futures rose in New York as Hurricane Ike surged through the Gulf of Mexico, shutting most offshore output for a second week.
Ike, a Category 2 storm, forced companies to keep a majority of offshore production shut, after closing platforms for Hurricane Gustav earlier this month. About 14 percent of U.S. natural gas output comes from offshore wells in the Gulf. Utilities and storage companies typically put gas into storage this time of year for use in the winter, when demand peaks.
``This is 100 percent Ike,'' said Peter Linder, an analyst and senior adviser at DeltaOne Energy Fund in Calgary. ``The storm is going to be in the producing area. We should see another bullish storage report next week.''
Natural gas for October delivery rose 28.1 cents, or 3.9 percent, to $7.529 per million British thermal units at 10:13 a.m. on the New York Mercantile Exchange. Prices have climbed 17 percent from a year ago.
Supplies advanced 58 billion cubic feet in the week ended Sept. 5 to 2.905 trillion cubic feet, the U.S. Energy Department reported yesterday. The average stockpile increase for the same week over the past five years is 78 billion cubic feet.
Stockpile gains were hampered by the closing of production last week in the Gulf for Gustav. About 93 percent of the Gulf's daily output of 7.4 billion cubic feet was shut as of yesterday because of Ike. The storm may strike a large portion of the Texas coast, forecasters said today.
To contact the reporters on this story: Reg Curren in Calgary at rcurren@bloomberg.net.