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Energy futures rise on Atlantic storm concerns, consumer spending report

Energy futures rise on Atlantic storm concerns, consumer spending report

Energy futures rose Friday, boosted by concerns about a tropical storm system forming in the Atlantic and a report that consumer spending rose in July.
A "tropical wave" in the central Atlantic is strengthening and could become a tropical depression Friday morning, the National Hurricane Center said. The storm system is 250 miles (400 kilometers) from the Caribbean Sea's Windward Islands and moving westward.
"The wave watchers are worried," said Andrew Lebow, an analyst at MF Global UK Ltd.
While the storm system's direction is unclear, energy investors bid prices higher any time a tropical storm or hurricane threatens oil and gas installations in the Gulf of Mexico.
"With storm clouds on the horizon, crude futures will be well-supported because no one will want to be short and out of the market for the extended U.S. holiday weekend," wrote Addison Armstrong, an analyst at TFS Energy Futures LLC in Stamford, Conneticut, in a research note.
Also supporting prices was the Commerce Department's report that consumer spending rose by 0.4 percent in July, double June's increase and in line with expectations. Energy investors pay close attention to economic data because the economy's strength is seen as a barometer of demand for oil and gasoline.
Light, sweet crude for October delivery rose 94 cents to $74.30 a barrel on the New York Mercantile Exchange, and natural gas futures rose 7.2 cents to $5.707 per 1,000 cubic feet.
September gasoline rose 1.10 cents to $2.0911 a gallon on the Nymex, and heating oil added 2.74 cents to $2.0558 a gallon.
Natural gas supplies are at record levels, and futures prices are lower than they were a year ago. However, heating oil inventories are lower than a year ago, and futures prices are higher. The result could be lower heating bills this winter for natural gas customers, and higher bills for heating oil customers.
In London, October Brent crude futures rose 99 cents to $72.89 a barrel on the ICE Futures exchange.
In addition to the Atlantic storm and economic news, Lebow said futures prices are being supported by traders' expectations that OPEC will hold production steady at the oil cartel's Sept. 11 meeting.
"You throw all that together, and you've got a nice rally," Lebow said.


Updated : 2021-06-14 04:59 GMT+08:00