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Crude futures stay above 67 { August 26 2005 } Original Source Link: (May no longer be active)
http://www.cbsnews.com/stories/2005/08/26/ap/business/mainD8C7FC1G0.shtmlhttp://www.cbsnews.com/stories/2005/08/26/ap/business/mainD8C7FC1G0.shtml
Crude Futures Slip, but Stay Above $67
VIENNA, Austria, August 26, 2005
(AP) Oil prices slipped on Friday, a day after a record-setting session, as fears of short-term supply disruptions eased when it appeared Hurricane Katrina would spare petroleum facilities in the Gulf of Mexico.
Still, analysts noted that the main thrust of the hurricane season was still ahead. That and concerns about refinery capacities ahead of the Northern Hemisphere winter supported bullish fundamentals, they said.
Light, sweet crude for October delivery fell 47 cents to $67.02 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract settled Thursday at a record $67.49, the highest closing price since oil began trading on Nymex in 1983, after touching $68 earlier in the day.
Gasoline fell more than a cent to $1.9500 a gallon while heating oil also dropped by more than a penny to $1.8546.
In London, October Brent crude-oil futures on the International Petroleum Exchange were down 24 cents at $66.03 a barrel.
Fears, which some analysts saw as overblown, that Katrina would disrupt oil and natural gas production in the region was the main catalyst pushing October Nymex crude futures to new highs in the past two days.
Reports that BP PLC and Royal Dutch Shell PLC evacuated nonessential staff from some of their Gulf of Mexico rigs and platforms as a precautionary measure also helped fuel concerns about the possible impact of the hurricane.
But early Friday in Asia, news that Hurricane Katrina made landfall without hurting Gulf facilities calmed the market. Such good news could be short-lived, as the world's limited excess capacity to offset any unscheduled outages continues to be at the pricing forefront.
The U.S. National Hurricane Center said after crossing the Florida peninsula, the storm could turn to the north over the Gulf of Mexico and threaten the state's western areas early next week _ a path that would keep it away from the heart of the oil- and gas-producing regions of the Gulf.
"It looks quite unlikely that Katrina would affect the Gulf of Mexico facilities, and that's what's bringing the price down now as people start to take profits," said chief commodities strategist Tetsu Emori of Mitsui Bussan Futures in Tokyo.
Traders are concerned about any potential disruption, however small it may be, because of a thinness in refinery capacity. Last year's Hurricane Ivan damaged Gulf facilities and forced a severe dip in output for several months.
Analysts say this fear is likely to stay and lend support to prices, which are at least 50 percent higher than a year ago. On an inflation-adjusted basis, oil prices would need to hit about $90 a barrel to match the highs of 25 years ago.
"The upward trend seems sustainable. Speculators are looking out for any news to buy on," said Ken Hasegawa of Tokyo-based brokerage Himawari CX, forecasting next week's market activity.
Frederic Lasserre, head of commodities research of Paris-based SG Securities, noted that the hurricane season had a ways to go yet.
"The market is still fearing that we might see some more serious hurricanes down the road," said Lasserre. That, plus concerns about whether refineries would be able to produce enough heating oil for the coming Northern Hemisphere winter was supporting prices, he said.
Still, "does (all) that justify $65 a barrel? It's difficult to tell," he added,
In other market-related news, Ecuadorean protesters agreed late Thursday to end a 12-day strike that had caused important losses to Ecuador's oil exports.
Nearly all of the Andean nation's exports, or about 290,000 barrels a day, go to the United States, the world's largest energy consumer.
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Associated Press Writer Gillian Wong contributed to this report from Singapore.
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