The Whew! factor

[notiCIas]

The Whew! factor

Relief that Rita did less damage to oil refineries than feared cuts oil and lifts stock futures.

September 26, 2005: 6:07 AM EDT

NEW YORK (CNN/Money) - Stocks look to get a lift Monday from falling energy prices after Hurricane Rita proved less destructive to the nation's energy sector than earlier feared.

U.S. stock futures were sharply higher, indicating a strong opening for stocks, as oil prices continued the decline seen in the special trading day Sunday.

The November light crude futures contract for NYMEX lost 79 cents to $63.40 a barrel in electronic trading, while the November contract for Brent crude fell 55 cents to $61.89.

While seven refineries with nearly 10 percent of the nation's refining capacity are in the area near the Texas-Louisiana border that took the direct hit from Rita, that's less than the more than 2.3 million barrels of capacity in the Houston-Galveston area that dodged the storm.

Oil analyst Peter Beutel said that after the concerns of last week, oil prices could be ready to go into a period of perhaps even prolonged decline after the dodging the worst forecasts for the storm.

"It does appear we've turned the corner here in this market," said Beutel on Sunday. "They're reacting to the fact that there was less damage than expected, rather than the amount of damage that did occur. Yes, it's going to take time to repair these refineries, and yes there will be at least one day we'll see prices run up. But I think we've probably seen the highest gasoline prices behind us."

Major markets in Asia closed higher on the falling energy prices Monday. Major European markets also were higher in early trading.

Treasury prices were lower, lifting the yield on the 10-year note to 4.28 percent from the 4.25 percent level late Friday. The dollar was little changed against both the euro and the yen.

In economic news, a report on existing home sales in August will give the latest reading on the closely watched real estate market. Economists surveyed by Briefing.com forecast that sales slipped to a 7.11 million annual pace in August from the 7.16 million pace in July that was the third strongest month on record.

In corporate news, aircraft maker Boeing (Research) reached a tentative agreement with its striking machinists that could have production workers back on the job by the end of the week. Shares of Dow component Boeing were up nearly 2 percent in light Frankfurt trading early Monday.