Following on this thread of posts over the past month, natural gas for November delivery rose 20.7 cents to a record $14.224 per million British thermal units on the New York Mercantile Exchange Tuesday afternoon after Interior Secretary Gale Norton warned it would probably take months before repairs to oil and gas production facilities in the Gulf of Mexico region would return production from that key region to normal. The Minerals Management Service reported that Gulf oil and gas production remains severely restricted, with 90% of the oil and over 70% of natural gas still off-line now a week and a half after Hurricane Rita came ashore.
The gas market was already stretched thin by heavy demand from power generators over the summer, but the double whammy of damage to production facilities from Hurricanes Katrina and Rita over the past month have jolted the natural gas market. As a result, futures contracts on the Nymex have nearly doubled since late July. The one good piece of news from the oil and gas markets was that crude oil, gasoline and heating-oil futures continue to weaken in the face of high pump prices and resultant diminished U.S. gasoline consumption in recent weeks. Oil futures fell for the third straight session on the Nymex as November light, sweet crude-oil futures slid $1.57 to $63.90 a barrel, the lowest price since mid-September.