Storm Menacing Gulf Coast Pushes Oil, Gas in Opposite Directions
(Bloomberg) -- As Tropical Storm Gordon barrels toward the U.S. Gulf Coast, oil and natural gas futures are moving in opposite directions.
Natural gas futures fell 9.3 cents to close at $2.823 per million British thermal units, the biggest daily drop since early February. Crude futures, meanwhile, rose 0.1 percent from Friday after earlier climbing as much as 2.3 percent.
The divergence is likely because gas traders see the greatest impact to prices coming from weakened power demand, as wind and rain keep temperatures lower than normal. Oil traders, on the other hand, see the risk to supply trumping data showing rising output from the Organization of Petroleum Exporting Countries.
Hurricane warnings have gone up along the Gulf Coast from eastern Louisiana to the Florida-Alabama line. Gordon was about 130 miles (209 kilometers) south-southeast of Biloxi, Mississippi, according to a National Hurricane Center advisory at 2 p.m. in Miami.
As of 11:30 a.m. in Houston, 9.2 percent of total offshore oil production in the U.S. Gulf of Mexico was shut in, with 9.1 percent of overall gas output halted, according to the Bureau of Safety and Environmental Enforcement. Staff had been evacuated from 54 production platforms and one rig.
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