Oil Prices Dip After Hurricane Moves Out To Sea
New York (AFP) Oct 24, 2005 Oil prices edged lower on global markets Monday as Hurricane Wilma moved into the Atlantic Ocean after averting most petroleum operations in the Gulf of Mexico. New York's main contract, light sweet crude for delivery in December, dropped 31 cents to 60.32 dollars per barrel in closing trade after falling as low as 59.30 dollars. In London, the price of Brent North Sea crude for December delivery shed 24 cents to close at 58.28 dollars per barrel. Light sweet crude had slumped to 59.15 dollars on Friday, the lowest level for three months. It has lost more than 16 percent of its value since hitting an historic 70.85 dollars per barrel on August 30 after Hurricane Katrina battered US Gulf Coast oil facilities. Marshall Steeves at Refco said the market had been cautious about Wilma because of the unpredictable nature of storms, but that there appeared to be no effect on petroleum operations. "Hurricane Wilma didn't do any damage in the Gulf," he said, while adding that the precautionary shutdowns of some operations might hurt supply levels. "Later in the afternoon, we got the report from the MMS (US Minerals and Management Service) saying that shut in production had exceeded one million barrel per day, so that's helped support crude oil in the last half hour," he said. "There was some precautionary shut-in last Friday ahead of Wilma but that's very minor. I think that will return probably in the next few days." A new report meanwhile said global energy demand growth in 2006 would be further eroded by the high price of oil, which should however remain above 50 dollars per barrel. The Centre for Global Energy Studies said in an influential report that the pace of oil demand growth would slow in 2006 to 1.1 million barrels per day (mbpd), or 1.3 percent. "The report suggested that OPEC (the Organization of Petroleum Exporting Countries) may in fact have to cut output next year if they want to maintain prices above 50 dollars a barrel," Bellew added. Offering a different view, Merrill Lynch commodity strategist and energy analyst Francisco Blanch said that gasoline prices on the Nymex have fallen more than 30 percent from their peaks during the hurricanes amid a surge in US gasoline imports, which have pressured prices of the fuel as well as crude. The decline in West Texas intermediate crude prices are likely to be temporary, he wrote in his note to clients. "Crude-oil production in the US Gulf of Mexico is coming back at snail pace, as the damage to infrastructure has been very extensive," he said. "We continue to believe that the US crude-oil market will tighten going into this winter, lending support to WTI crude-oil prices." Elsewhere, traders were keeping an eye on Iraq, where oil exports were completely halted by a combination of insurgent attacks in the north and bad weather in the south. Exports from the southern oil fields had been running at as much as 1.6 million barrels per day (bpd) while exports from the north had stood at 300,000 to 400,000 bpd. The fact that Iraqi exports had stopped "would have been a worry in the past but there seems to be quite a lot of crude around at the moment", Bache Financial trader Christopher Bellew said. Community Email This Article Comment On This Article Related Links SpaceDaily Search SpaceDaily Subscribe To SpaceDaily Express Powering The World in the 21st Century at Energy-Daily.com
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