Alternative energy stocks rally as gasoline hits record
August 30, 2005 12:58:50 (ET)
NEW YORK (MarketWatch) - Shares of alternative energy companies rallied Tuesday as gasoline futures surged to record levels amid concerns about the damage to petroleum facilities caused by Hurricane Katrina.
Unleaded-gasoline futures for October delivery climbed as much as 17% to a fresh high of $2.42 a gallon as traders continued to assess reports from facilities in the Gulf of Mexico.
Supply concerns also boosted crude futures to a record $70.85 a barrel, while natural gas rallied 5%.
"There is clear desperation among physical players actually looking for wet barrels of gasoline, and their desperation is leading to eye-popping premiums above gasoline futures," said Tom Kloza, chief oil analyst at Oil Price Information Service.
"The panic is greater than anything I have seen since the Iranian Revolution," he said.
At the retail level, the average price for a gallon of regular unleaded stood at $2.604 Tuesday, according to AAA's Daily Fuel Gauge Report. That's slightly below the record $2.614 on Aug. 22, but 39% above the $1.874 of a year ago.
Analysts said prices will continue to set records as more information trickles in - but even that process could take weeks.
"Oil and natural-gas prices will remain high given the magnitude of the near-term impact and the potential for long-term damages, plus the potential for additional, unexpected supply disruptions in such a low spare capacity environment," said Brian Gibbons at CreditSights.
Capstone Turbine (CPST, Trade), which makes power generators, was a key advancer, rising for the fourth-consecutive session. The stock added 9.8% on Monday on expectations of lengthy power outages in the hurricane's wake and an upgrade from First Albany.
Capstone shares were last up 11% at $5.11.
Other gainers included hydrogen storage systems company Millennium Cell (MCEL, Trade), up 14% at $2.64; FuelCell Energy (FCEL, Trade), up 6.2% at $10.13, Plug Power (PLUG, Trade), which added 5.2% to $6.57, Ballard Power Systems (BLDP, Trade), up 4.2% at $4.69 and Mechanical Technology (MKTY, Trade), up 6.2% at $3.24.
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