Natural gas rallies nearly 5% after inventories report
By Michael Kitchen and Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures rose Thursday, buoyed by Chinese data and news that a tropical storm bearing down on Mexico has closed ports and oil installations in the Gulf of Mexico.
Crude for September delivery CLU2 +0.21% added 60 cents, or 0.6%, to $93.95 a barrel on the New York Mercantile Exchange.
Weak gains for Chinese consumer prices and deflation for producer prices stoked expectations for further policy easing from Beijing. Read more on Chinese economic data.
Thursday’s gains undid a 32-cent loss for September crude in the previous session, with the market shrugging off an unexpectedly large 3.7-million barrel drop in U.S. inventories. Read more on Wednesday’s oil trade.
Tropical Storm Ernesto shut down Mexican oil-port installations, raising hopes of a further decrease in U.S. inventories. The closures will reduce oil imports from Mexico, one of the three largest foreign suppliers to U.S. refineries., along with Canada and Saudi Arabia.
Investors discounted this week’s supply drop as the result of specific pipeline problems earlier.
Ernesto, with top winds of 60 miles per hour, is about to cross the coast of Mexico near Coatzacoalcos, according to the National Hurricane Center. A tropical storm warning is in effect for Veracruz and surrounding areas. The closures include the port of Coatzacoalcos, a key oil-exporting facility.
September natural gas NGU12 +4.88% turned higher and rallied Thursday after the Energy Information Administration reported a smaller-than-expected increase in supplies for the week ended Aug. 3.
The contract gained 15 cents, or 5.2%, to $3.08 per million British thermal units. It had traded at 2.93 per million Btus before the report.
The EIA reported an increase of 24 billion cubic feet in natural-gas supplies for the week. Analysts polled by Platts had expected an increase between 27 bcf and 31 bcf.
That also contrasted with a 31-bcf increase in the corresponding week of 2011 and below the five-year average rise of 45 bcf.
Elsewhere in the energy complex, September gasoline futures RBU2 -0.13% advanced less than 1 cent, or 0.1%, to $2.98 a gallon.
September heating oil HOU2 +0.40% also rose 2 cents, or 0.6%, to $3.03 a gallon.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
