Natural Gas Price Never Lower in 2009

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By JOHN PORRETTO (AP) – 1 day ago

HOUSTON — The season's first Atlantic hurricane and two other storms have done nothing to spur a rise in energy prices, largely because supplies are high and demand low, but oil companies are keeping close watch on their offshore operations in the Gulf of Mexico.
After a quiet start to the 2009 hurricane season, three storms whipped up in recent days, though none appears to pose a threat to the U.S. Gulf's massive energy complex.
Crude prices fell to new lows for the month Monday, dropping to around $65 a barrel, and natural gas prices slumped to new lows as well.
Pump prices have changed little in the past week. On average, a gallon of regular unleaded was selling for $2.641 on Monday, according to auto club AAA, Wright Express and the Oil Price Information Service. That's less than a penny lower than average price a week ago.
The apparent indifference to storms in the Atlantic stands in stark contrast to last year, when oil prices ticked higher as tropical depressions formed.
Several factors are involved, the biggest of which is a recession that's crushed energy demand at home and abroad. U.S. crude inventories rose again last week and are nearly 20 percent above year-ago levels. Natural-gas supplies also are bloated.
The U.S. Gulf accounts for about one-quarter of domestic oil output, but the nation's reliance on the region for natural gas has lessened in the past few years as producers tap into massive reserves onshore.
Gulf gas production accounts for about 12 percent of total U.S. output, according to the Energy Information Administration, down from roughly 20 percent only four years ago.
So even a significant storm could have little or no impact on natural gas and even crude prices, said trader and analyst Stephen Schork. He noted natural-gas prices failed to jump even when hurricanes Gustav and Ike raked the region a year ago.
"And let's not forget we're still in the midst of a pretty severe economic downturn," Schork said.
Ike and Gustav shut down Gulf production for several weeks in late August and September, and shuttered several refineries. That led to gasoline shortages and price spikes above $4 a gallon throughout the Southeast.
But the storms caused far less damage than Katrina and Rita in 2005, a one-two punch that destroyed 108 production platforms, damaged hundreds of others and shut down production for months, in some cases.
For now, major producers in the Gulf such as Royal Dutch Shell PLC, Chevron Corp. and BP PLC say they're monitoring the systems but are operating normally.
Hurricane Bill picked up strength in the open Atlantic Monday on a path toward Bermuda, while what was left of Tropical Storm Claudette brought rain to the Florida Panhandle and southern Alabama. Elsewhere, Tropical Depression Ana was moving quickly across the northeastern Caribbean Sea. It was expected to reach the coast of the Dominican Republic later Monday.
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