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Energy Markets on Edge as Isaac Approaches

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    IAF Advisors managing partner Kyle Cooper on fears in the energy market created by Isaac.

  • Duration 3:42
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-- -- -- Well Isaacs half to a box seats on strange similarities to Hurricane Katrina that track back in 2005 course we -- remember that.

And that has energy markets today on edge BP Royal Dutch Shell.

Murphy Oil all of evacuating rigs closing down some of the operations there in the Gulf of Mexico and Marathon Oil Bolero.

Doing much of the same on -- Louisiana refineries.

But or until it is let's see where it is right now it's down one point 1% down a -- ghost sex at 95.

09 is all about the rumors that are flying about the potential us PR release overnight releasing the reserves so Kyle Cooper managing director of research for but cypress energy management natural gas hedge fund.

And I -- advisors.

In Houston first and foremost what do you think about the prospects of possibly releasing some of the reserves using it's likely -- -- it's a good idea.

Possibly very likely however keep in mind you don't really use crude.

We use gasoline and distillate what's gonna happen is with this flawed and with the surge from the storm surge we very possibly going to be closing a lot of refineries so.

In response if you look at the market crude is down.

Products are up because they might have -- crude but we have to turn those into usable products -- the refiners.

So what are your what are your team and was everybody talking about -- and your group what is our number one can honestly about the closures that's happening right.

Absolutely then also there's there's the real potential for infrastructure damage that's the real concern.

Shutting off the production in the Gulf of Mexico is about one point four million barrels of oil.

About -- happy C after the federal source of natural gas that maybe two BC FO of Louisiana production run off the shore.

But in a 65 BCF natural gas market and an 1819 million barrel.

Day oil market that's not significant what the real fear is is that there's some significant infrastructure damaged right this storm creates.

No real damage like Katrina and Rita did back -- 05.

And that and that obviously is a significant worry for everybody.

Let's ask you about the price of oil right now we did we see it sitting right around that 200 day moving average went -- which it often does -- sits there.

For a few days and in either breaks out you know maybe it'll go to 105 or does it.

Go back to 77 dollars that low of last June -- -- where do you think our path leads us here.

I think that given the demand characteristics in the US just patrolling demand.

At below nineteen million barrels for this time years really really pretty -- it.

I just -- on demand remains very tepid.

I think if there's not some type infrastructure damaged keep in mind at all those refineries shutting down actually -- -- demand significantly as well so.

Unless there's infrastructure damage I see as being a little -- here from the mid -- type level.

And what's your what's your global picture as you're talking about weaker demand here and obviously -- when you talk about a tough economy -- what is the global stock.

Absolutely -- it's you know Europe I think is and worse situation than we are.

Demand there's been -- for quite some time there are continuing signs that China while still growing -- growing in a much slower pace.

Also I think that's overall the demand outlook.

While still positive is much less rosy than it was beginning of the year certainly and eleven and thus I think that's mid to upper ninety's type level in crude.

Barring some major supply disruption of of lasting nature.

Problem Lou on the high side will trend a little -- I've ten seconds do you have a stock that you in your firm are loving these days Sarah pick our viewers.

Our group we actually we look at we we look it.

Yet we look at commodities only so we don't look at stocks where we're really focused on the fundamentals and the physical markets and in and the commodity itself.

Not the equities -- right Kyle Cooper thank you so much and we appreciate the insight.

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