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Monday, November 09, 2009

Hurricane Ida pushes crude oil futures higher

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With last Friday’s non-farm payroll report revealing the worst US unemployment landscape for 26 years,  and no signs of any meaningful drawdown to historically high oil and gasoline inventories, some oil bulls appear to have resorted to rain-dancing over the weekend. Crude oil price has advanced over $1/barrel this morning as hurricane Ida begins to approach the Gulf of Mexico.


With the key oil producing US Gulf Coast under Hurricane alert many of the world’s major producers, including British Petroleum (LSE: BP) , ExxonMobile (NYSE: XON), Chevron (NYSE: CBX) and Anadarko (NYSE: APC) have begun securing off-shore rigs and coastal refinery facilities in preparation for the storm. Across many operations non-essential workers are being evacuated and some production has been temporarily curtailed. Key decision makers will be keeping a keen eye on meteorological forecasting over the coming hours as they try to walk a tight-rope between cost management and safety concerns.


In the commodity market crude oil futures have risen steadily through most of the European session, futures last stood just below $79 per barrel, recovering somewhat from Friday’s fall which was impacted by poor US employment data.


Oil and Gas producers in London followed the crude oil price higher, Oil and gas stocks were in buying mode this morning as oil prices increased. Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) led the second in the FTSE 100, advancing 3%. Cairn Energy (LSE: CNE) followed with a 2.5% gain.


Supermajors BP and Shell (LSE: RDSB) both added 1.8%, while BG Group (LSE: BG) improved 1.5%.
Midcaps also rose with Heritage Oil (LSE: HOIL) and Dana Petroleum (LSE: DNX) tacking on 2% and 1.5% respectively, while Dragon Oil (LSE: DGO) was flat.


Juniors also traded well in the morning. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) was in the lead with a gain of over 9%. US focused junior Empyrean Energy (AIM: EME), North America focused oil & gas junior Pantheon Resources (AIM: PANR) and North Sea explorers Xcite Energy (AIM & TSX: XEL) followed with gains of over 5%.


Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) climbed 4.5%.
North American based explorer Nighthawk Energy (AIM: HAWK) and Ukraine focused gas producer Regal Petroleum (AIM: RPT) both gained 3%.

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