Crude and natural gas futures prices rocketed higher Friday on the New York Mercantile Exchange as a tropical depression in the Gulf of Mexico threatened to damage production.
On other markets, cotton futures also jumped on the storm, while frozen orange juice futures tumbled to a nine-week low.Crude and natural gas rose as market participants covered positions in the event the tropical depresssion strengthens into a storm over the weekend and causes widespread damage.
It would be the third tropical storm in three weeks in the Gulf, a region that accounts for one-fifth of U.S. crude production and is a key import center. About half of U.S. natural gas production also is concentrated in facilities offshore of Texas and Louisiana.
Crude also was supported by fears Hurricane Georges in the Atlantic would strike the huge Amerada Hess 425,000 barrel-a-day refinery in St. Croix, the Virgin Islands.
Crude for October delivery rose 63 cents to $15.49 a barrel; October heating oil rose 1.74 cents to 42.28 cents a gallon; October unleaded gasoline rose 1.84 cents to 45.58 cents a gallon; October natural gas rose 12.2 cents to $2.260 per 1,000 cubic feet.
Cotton futures also rose sharply on the New York Board of Trade amid expectations the storm will make landfall near the Louisiana-Mississippi border sometime this weekend, threatening to further reduce yields for what will be one of the smallest crops in years.
Cotton futures now are particularly sensitive to any hint of damage after drought ravaged the Texas crop and excessive rains reduced yields in the Southeast. The overall U.S. crop now is pegged at 13.56 million bales by the U.S. Agriculture Department.
Analysts also noted cotton received a boost by reports of damage to Indian cotton areas following widespread rain. That comes on top of still-undetermined damage to the Chinese crop, which typically is the world's largest.