Natural-gas futures rose to a record as production lost to Hurricanes Katrina and Rita was slow to recover.
The two hurricanes, striking within a month of each other, have taken off-line a total of 188.5 billion cubic feet of gas since Aug. 26, or 5.2 percent of annual production, the U.S. Minerals Management Service said Thursday.
About 80 percent of output in the gulf has been closed since Rita made landfall last weekend.
“What’s really driving us here is continued concern about how much damage has been done by either Rita or Katrina,” said Carl Neill, an analyst at Risk Management Inc. in Chicago. “It looks like things are a little worse than originally assumed, and things aren’t coming back online as quickly as thought.”
Gas for November delivery on the New York Mercantile Exchange rose 9.6 cents, or 0.7 percent, to $14.196 per million British thermal units, a record closing price.
Consumer utility bills this fall and winter will reflect the record prices.
Xcel Energy, which provides natural gas to 1.2 million Coloradans, said October heating bills will be almost double those of September because of higher gas costs and more home heating as temperatures cool.
The average residential heating bill in October will be $64, compared with $33 in September. Those rates do not include the cost of electricity.
By December, average residential heating bills are projected at $171, compared with $127 in December 2004.
“The average person has no idea how expensive things are going to be this winter,” Neill said. “It’s not going to sink in until they get the first bill, and then the politicians will be screaming in the streets.”
The Gulf of Mexico accounts for 24 percent of U.S. natural-gas production.
A U.S. Energy Department inventory report showed natural-gas supplies last week rose by a less-than-expected 53 billion cubic feet to 2.885 trillion cubic feet.
Utilities put natural gas into the nation’s more than 400 underground storage caverns from April to November for use during the winter.
Denver Post staff writer Steve Raabe contributed to this report.
