Petroleum futures fell to pre-Hurricane Katrina levels for the first time since the storm yesterday on news of heavy losses in refined products and market concern that that high gasoline prices have depressed demand for product. Earlier posts on the developing economic effects of Katrina over the past couple of weeks are here, here, here, here, here, here, here, and here.
Benchmark light, sweet crude oil futures for October settled at $63.34 a barrel on the Nymex Exchange, while Nymex gasoline futures for October settled down 8.60 cents at $1.8737 a gallon. Losses in heating oil futures on the Nymex were also substantial as the October contract settled down 8.22 cents at $1.8143 a gallon.
Despite the downward trend in the gasoline futures market, news on the Gulf oil and gas production front remained measured. Although operations at the Louisiana Offshore Oil Port were fully restored yesterday for the first time since the storm, oil production in the Gulf of Mexico showed only marginal improvement during the weekend as about 57.4% of daily output remains offline. Almost 60% of the daily total was offline as of this past Friday.