To enjoy the full Mail & Guardian online experience: please upgrade your browser
20 Sep 2007 16:10
Oil prices kept rising on Thursday after reaching record highs in the previous session on United States refinery outages and declines in US oil inventories.
A decline earlier in the day was reversed in part by worries over a potential tropical-storm threat to oil and gas installations in the Gulf of Mexico, analysts said.
Light, sweet crude for October delivery gained 25 cents to $82,18 a barrel in electronic trading on the New York Mercantile Exchange by mid-afternoon in Europe.
The contract on Wednesday rose 42 cents to settle at a record $81,93 a barrel after jumping to a new intraday high of $82,51 a barrel.
A weather system with the potential to become a tropical storm appeared to be heading toward the US state of Louisiana, prompting emergency officials to be on guard on Wednesday. Shell announced evacuation plans for hundreds of staff from its rigs in the region.
“The threat of a storm ahead of the weekend will likely keep oil prices on the boil,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
“Nobody wants to be caught short ahead of the weekend in case a storm turns into a major hurricane that causes damage in the US Gulf of Mexico.”
The US National Weather Service said the low-pressure area could affect south-east Louisiana and south Mississippi on Friday night or Saturday and that it would have the potential to become a subtropical or tropical storm.
Shum added that prices also remained well supported by tight supplies, highlighted in a US Energy Department report on Wednesday of a larger-than-expected drawdown in crude inventories last week.
Crude inventories fell by 3,8-million barrels during the week ended September 14, said the Energy Information Administration (EIA), the department’s statistical arm.
However, crude inventories remain at the upper end of their average range for this time of year, the EIA said.
Refinery utilisation fell 0,9 percentage point to 89,6% of capacity. Analysts expected a decline of half a percentage point.
However, petrol supplies rose by 400 000 barrels, the EIA said, countering analyst predictions of a 1,3-million-barrel decline.
The EIA also reported that distillate inventories, which include heating oil and diesel fuel, rose by 1,5-million barrels last week, more than the 1,1-million analysts expected.
Dow Jones Newswires reported that ExxonMobil shut down a crude processing unit at its 348 000-barrel-a-day refinery in Beaumont, Texas, and that a piece of gasoline-making equipment at Chevron’s 266 000 barrel-a-day refinery in El Segundo, California, had been shut down. The impact this had on production was unclear.
In London, October Brent crude fell 35 cents to $78,12 a barrel on the ICE futures exchange.—Sapa-AP
Create Account | Lost Your Password?