Is Katrina a “Perfect Storm” for Oil Futures? ($70 Oil????)

[Junkdrawer]

Last Thursday and Friday, Oil future fell because the market thought that Katrina was going to miss the Gulf oil installations:

NEW YORK -- Oil prices fell more than $1 a barrel Friday as traders took profits from recent record highs, but worries lingered that Hurricane Katrina might disrupt supplies of refined fuels from the Gulf Coast.

Light, sweet crude for October delivery fell $1.36 to settle at $66.13 a barrel on the New York Mercantile Exchange, after rising as high as $67.95. The contract settled Thursday at a record $67.49, the highest closing price since oil began trading on Nymex in 1983, after touching $68 earlier in the day.
….

Fears that Katrina would disrupt oil and natural gas production in the region were the main catalyst pushing crude futures to new highs earlier this week.

"It seems like every storm we get, the market gets more sensitive to it," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. Furthermore, "there's an underlying bullish market that goes beyond the storm."

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/26/AR2005082600177.html

Here’s the NHC warnings archive. Note that on Tuesday and Wednesday, when the markets thought Katrina might hit the oil facilities, oil futures shot up to $68. Then, when the path was thought to be close to the Florida Coast, futures dove down to $66. Most interesting is that the 11AM Friday path was still pretty close to Florida, but by 5 PM Friday, the path radically switched to right through the regions the market was worried about:

http://www.nhc.noaa.gov/archive/2005/KATRINA_graphics.shtml

So, as far as I see (I don’t trade oil) the market closed Friday at 2:30 PM and won’t open until Monday morning, with online trading opening Sunday Night:

http://www.nymex.com/tradin_hours.aspx

So oil traders have all day today and most of Sunday to build up demand for oil futures. Could oil hit $70 when trading opens? Would the oil companies use that to further raise prices?

[Massacure]

1. Yes, prices are going up.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x4471968

[Junkdrawer]

5. YDogg posted an excellent graphic on that thread...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x4471968#4472126

[Renew Deal]

2. Oh boy

That thing has taken a turn. It was on a completly different path yesterday morning. That storm is going to become huge. If it stays that way, Alabama gets hit again.

[Skink]

3. Covert cloud seeding by OPEC.

Got to push that storm closer to the Mississipi where all the refineries are.:tinfoilhat:

[Junkdrawer]

4. No..but the 11AM to 5 PM Friday FORECAST shift... (GRAPHICS)

is pretty odd and *somebody* could well make a huge amount of money on that shift. Not saying anyone did anything wrong, but I'll bet a lot of traders are wearing tinfoil hats right now... ;)

[geomon666]

9. There's nothing tinfoil about it.

This shift in forecast is because the storm is going slow which allows for atmospheric conditions to change which alter the course of the storm. We got hit bad in Miami because the storm slowed down enough to grow into a hurricane and also altered it's course to a southwest one instead of the due west which was forcasted.

[Junkdrawer]

6. "Hurricane threatens Gulf oil production"...

The National Hurricane Center now expects the year's fourth hurricane to make a second landfall near the major oil and gas hub at Port Fourchon, La., sometime late Sunday or early Monday, and then continue inland to New Orleans. Read more from NHC.

With the storm days away from reaching land, its final course is still uncertain, with landfall possible anywhere from western Louisiana to Panama City, Fla. See where it could hit.

A hurricane watch was in effect for the southeast coast of Louisiana, including New Orleans and Lake Ponchartrain. Residents of coastal areas were advised by Louisiana officials to prepare to evacuate. A hurricane watch means hurricane conditions should be expected within 36 hours.

The NHC said Katrina could strengthen to a Category 4 or possibly a Category 5 storm before making landfall. Only three Category 5 storms have reached the U.S. mainland in the past 150 years. Category 4 storms have winds of more than 130 miles an hour, while Category 5 storms have winds of more than 155 miles an hour.

About one-sixth of the U.S. oil supply comes through the Port Fourchon facilities. The port, the only one in the region that handles supertankers, accounts for about 13% of U.S. oil imports. About 27% of U.S. domestic production comes through the port's pipelines.

....

http://www.marketwatch.com/news/story.asp?siteid=google&dist=googlesnap&guid=%7BF7E49D16-0EF9-4D05-89DF-6020DC6793BE%7D

Button down the hatches....

[magellan]

7. Katrina is keeping the NHC guessing

I've read on a couple weather forums, expect the next update track to be moved some to the east again, away from NO. Still, CAT 4 or 5...those winds/swells will wreak havoc with the rigs....

[Skink]

8. New Orleans is not prepared for the big one...

They are below sea level to begin with.

[lovuian]

10. Yes this will raise Oil prices most definitely!!! Super Ouch!!!

:crazy:

I'll make the suggestion of getting tanks of gas filled this weekend before the stock market opens!!!

Just a suggestion!!!