Oil prices hold above $65 as storm sets course for Gulf of Mexico
Oil prices hold above $65 as storm sets course for Gulf of Mexico
Associated Press, Vienna
Oil futures held above US$65 a barrel on Tuesday amid lingering
global supply concerns despite resumed crude flows from Ecuador
and Nigeria.
The rise came amid expectations that Wednesday's U.S.
petroleum inventories will show declines in both crude and
gasoline stocks with little indication that high prices are
slowing demand.
A new tropical storm heading toward the Gulf or Mexico added
to worries. Still analysts cautioned against overemphasizing its
effect on the market, saying such weather was widely expected
this time of year.
Light, sweet crude for October on the New York Mercantile
Exchange was down 2 U.S. cents at $65.63 a barrel by afternoon in
Europe on its opening day of trade as the front-month contract.
It had settled 14 U.S. cents lower to $65.65 on Monday.
Nymex crude reached an all-time high of $67.10 a barrel Aug.
12. Prices are around 40 percent higher than a year ago, and the
Global Center for Energy Studies, or GCES, warned on Tuesday that
it could keep climbing.
"Rising global oil demand is continuing to put pressure on the
industry's ability to supply enough oil," the London-based
resources institute said in its latest report.
The world's daily diet of crude is expected to average around
83 million barrels in the current third quarter before spiking to
85.5 million barrels a day in the fourth quarter of 2005 during
winter, GCES said.
With the end of the American summer driving season looming,
analysts are now watching winter demand for distillates --
heating oil, diesel and jet fuel -- when consumption of the
commodities rise.
Nymex heating oil was up slightly at $1.8165 a gallon (3.8
liters) while gasoline was down somewhat, fetching $1.8558 a
gallon.
On London's International Petroleum Exchange, October Brent
crude was 17 U.S. cents at $64.67 a barrel.
On Wednesday, the U.S. Department of Energy will release its
weekly petroleum data snapshot, an indicator of demand from the
world's largest energy user.
Analysts surveyed by Dow Jones Newswires predicted that
gasoline stocks will fall by a million barrels from a week ago,
while crude probably fell by 255,000 barrels.
Meanwhile, Tropical Storm Jose formed and began to pick up
strength late Monday, heading for Mexico's Gulf coast as the
active Atlantic hurricane season continued to roil oil markets.
Hurricanes have forced rig and production shutdowns on both the
U.S. and Mexican sides of the Gulf, hurting supply.
Over the short term, however, some analysts suggested prices
could drop.
"It needs more than a tropical depression," said Paul
Horsnell, head of energy research at Barclay's Capital in London
of what it would take for a new rally.
"You will be looking at the low $60s before any platform can
be made for a more sustained move up."