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Oil and natural gas rise on Atlantic storm concerns, consumer spending report

Oil and natural gas rise on Atlantic storm concerns, consumer spending report

Oil and natural gas futures rose Friday, boosted by concerns about a tropical storm system forming in the Atlantic and reports that consumer spending and factory orders rose in July.
Prices retreated from earlier highs, however, after Federal Reserve Chairman Ben Bernanke said the central bank will act as needed to prevent credit liquidity problems from hurting the broader economy, but did not say whether it will cut the benchmark federal funds rate.
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, oil and natural gas 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, Connecticut, in a research note.
Also supporting energy prices were government reports that consumer spending rose by 0.4 percent in July, double June's increase and in line with expectations, and that factory orders jumped a more-than-expected 3.7 percent last month. Energy investors pay close attention to economic data and Bernanke's remarks because the economy's strength is seen as a barometer of demand for oil and gasoline.
Light, sweet crude for October delivery rose 76 cents to $74.12 a barrel on the New York Mercantile Exchange, and natural gas futures climbed 6.8 cents to $5.703 per 1,000 cubic feet.
September gasoline fell 1.01 cents to $2.07 a gallon on the Nymex after rising more than 2 cents earlier, while heating oil added 1.90 cents to $2.0474 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 76 cents to $72.66 a barrel on the ICE Futures exchange.
In addition to the Atlantic storm and economic news, Lebow said oil 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 : 2021-05-17 22:28 GMT+08:00