The price of oil fell 0.03% to $ 68.72 a barrel at 8:28, while the price of natural gas had fallen 1.4% to $ 4.328.
The fall in prices is partly due to the rise in oil and gas prices last week. The U.S. benchmark WTI crude rose 11% last week, while natural gas prices rose 13%. It’s a good reminder that the market anticipates events and doesn’t just react to them.
- Natural gas is rising. Inventories of gas producers are also growing.
At the same time, the long-term damage to production in the Gulf region is likely to be limited, but processing may take longer, says Goldman Sachs analyst Neil Mehta. “[We] Note 96% of the Gulf of Mexico crude oil and 94% of the Gulf of Mexico natural gas were shut down, ”he writes. “Historically, production in the Gulf of Mexico has recovered rapidly from weather events, and based on early reporting, we expect faster returns from oil production than refining production in the region.”
The companies with the most exposure to the Gulf of Mexico are e.g.
(OXY), Mehta writes. Chevron has risen 0.4%, Exxon has risen 0.6%, Occidental has risen 0.9% and Murphy Oil will make little change in pre-trade on Monday.
But regardless of the amount of disruption, there is also one thing that investors can trust. “Research [is] probably the most, although this is transient, as currently the winds destroying New Orleans at +150 mph will eventually cease, ”writes James West West, an analyst at Evercore ISI. “Our thoughts and prayers are with those at sea and on the Gulf coast.”
Write to Ben Levisohn at [email protected]