Oil shoots up on Earl threat, rig explosion
Published: Sep 2, 2010 23:46 Updated: Sep 2, 2010 23:46
NEW YORK: US crude oil futures rose on Thursday as Hurricane Earl threatened US East Coast refineries and an explosion hit an offshore oil and gas platform in the Gulf of Mexico.
News that an oil and gas rig owned by Mariner Energy Inc off the coast of Louisiana was on fire Thursday, sparked buying before midday.
Oil got further support from concerns about Hurricane Earl, which was threatening 1.1 million barrels per day (bpd) of refining capacity along the East Coast.
Canadian energy companies were also preparing for the storm, with EnCana Corp. suspending workers on a drilling rig.
The latest advisory by National Hurricane Center showed the hurricane was about 300 miles (483 kilometers) south of Cape Hatteras, North Carolina, with winds of 140 miles per hour (225 kph).
US crude settled up $1.11 at $75.02 a barrel. ICE Brent gained 61 cents to $76.96, with its premium to US crude remaining elevated because of bloated US inventories.
With refineries threatened, US gasoline futures led energy gains on the New York Mercantile Exchange. Gasoline for October delivery was up 3.25 cents at $1.9219 a gallon.
Meanwhile, stocks rose while US Treasuries fell on Thursday. The euro rose against the dollar, supported by healthy results at Spanish and French bond auctions and stable global equities.
US Treasury debt prices eased as gains on Wall Street undermined the safe-haven appeal of government debt.
The FTSEurofirst 300 index of top European shares ended flat as investors took a breather after the previous session's jump while recently hit construction stocks extended their recovery, aided by positive US data.
The Dow Jones Industrial Average was up 9.23 points, or 0.09 percent, at 10,278.70. The Standard & Poor's 500 Index was up 5.86 points, or 0.54 percent, at 1,086.15. The Nasdaq Composite Index was up 14.79 points, or 0.68 percent, at 2,191.63.
The benchmark FTSEurofirst index, which surged 2.9 percent on Wednesday following strong manufacturing data from the United States and China, is still down 2.1 percent from a peak in early August.
Comments from European Central Bank President Jean-Claude Trichet had limited impact on the euro. The euro was up 0.12 percent at $1.2827 from a previous session close of $1.2811 supported by healthy results at Spanish and French bond auctions.
France and Spain sold 12.2 billion euros of bonds, with the average yield on the 5-year Bono dropping at auction and the paper easily absorbed as the yield fell after the tender.
Against the Japanese yen, the dollar was down 0.28 percent at 84.20 from a previous session close of 84.420.
US Treasury debt prices fell as investors took profits from a recent hefty bond rally and ahead of the jobs report on Friday.
The benchmark 10-year US Treasury note was down 14/32, with the yield at 2.6285 percent. The 2-year US Treasury note was up /32, with the yield at 0.5013 percent. The 30-year US Treasury bond was down 48/32, with the yield at 3.7304 percent.
Spot gold prices rose $6.25, or 0.50 percent, to $1250.10.
