Oil prices remained below $64 a barrel in Asian trade on Monday as preliminary assesments showed key Untied States oil facilities in the Gulf of Mexico had escaped severe damage from Hurricane Rita, dealers said.
At 12.50pm (4.50am GMT), New York’s main contract, light sweet crude for delivery in November, was at $63,27 a barrel after an extraordinary trading session on Sunday when it fell $1,01 to $63,18 from Friday’s close of $64,19.
Reports that oil operations off the Gulf Coast suffered minimal damage from Hurricane Rita over the weekend were greeted with great relief by the market, which had been preparing for the worst.
“It marks the trend that really started on Friday,” said Victor Shum, an analyst with US energy consultancy Purvin and Gertz in Singapore.
“The drop on Friday in the market was quite significant … there were already signs of the hurricane weakening.
“The hurricane made landfall and there was not as much damage so the market has continued its downturn.”
Oil prices fell $2,31 to close at $64,19 on Friday as Rita weakened, easing market concerns that vital US oil operations would be hit for the second time in four weeks by a hurricane.
“The reports from the Gulf yet are still spotty … but it appears that those platforms made it through this in relatively good shape also,” Texas Governor Rick Perry said in a television broadcast on Sunday.
The US coast guard reported “preliminary minimal damage” to the facilities.
The network of refineries in Texas represents about 25% of US refining capacity. Oil and gas prices had soared four weeks earlier when another storm, Hurricane Katrina, bowled into Lousiana, devastating New Orleans.
The Texas refinery town of Port Arthur appeared to be hard hit, with water waist-deep in some places but oil platforms and refineries dotting the coasts of Texas and neighbouring Louisiana appeared to have survived Hurricane Rita without major damage.
About 81% of 819 platforms and 69% of 134 rigs operating in the Gulf of Mexico were evacuated before the storm, which struck the states of Texas and Louisiana on Saturday, the US Minerals Management Service (MMS) reported on its website.
The shutdown represents a loss of 1,5-million barrels of crude a day.
About 80,5% of natural gas production in the area was also halted, according to the MMS. – AFP