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Oil approaches 61 as tropic storms threaten sypply Original Source Link: (May no longer be active)
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Oil Approaches $61 as Tropical Storms Threaten U.S. Supply
July 6 (Bloomberg) -- Crude oil approached $61 a barrel in New York after Tropical Storm Cindy disrupted shipments along the U.S. Gulf coast and another storm threatened the region. Gasoline and heating oil rose to a record as refineries shut.
Tropical Storm Dennis may strengthen to a hurricane today, becoming the earliest ever to form in the Atlantic, the U.S. National Hurricane Center said. The storm may enter the Gulf in three days. Oil output in the Gulf was cut as Cindy approached. Motiva Enterprises LLC closed units at its refinery in Norco, Louisiana, and Murphy Oil Corp. shut a refinery.
``Cindy has passed but Dennis is on the way,'' said Aaron Kildow, a broker at Prudential Financial Derivatives LLC in New York. ``Dennis looks like it will be much stronger and could lock down platforms in the Gulf. It's only the first week of July and we've had four named storms, which is an awful lot.''
Crude oil for August delivery rose 91 cents, or 1.5 percent, to $60.50 a barrel at 12:04 p.m. on the New York Mercantile Exchange. Futures touched $60.85 a barrel, the highest since June 27, when oil reached a record $60.95. Prices are up 53 percent from a year ago.
Heating oil for August delivery surged 3.86 cents, or 2.2 percent, to $1.771 a gallon in New York. Prices touched $1.785 a gallon, the highest since the contract was introduced in 1978. Heating-oil futures are 63 percent higher than a year ago.
Gasoline for August delivery rose 6.82 cents, or 4.1 percent, to $1.75 a gallon. Prices touched $1.757, the highest since the contract was introduced in 1984.
Refinery Closures
Motiva, a joint venture between Royal Dutch/Shell Group and Saudi Aramco, said it was evaluating returning the refinery to normal operations after closing last night because of a power outage. The refinery can process 240,000 barrels of crude oil a day and is located 20 miles north of New Orleans.
Murphy said it was starting its Meraux, Louisiana, refinery today. A company spokeswoman couldn't say what time the outage happened at the 125,000 barrel-a-day facility or how long it was shut. Meraux is outside New Orleans.
The Louisiana Offshore Oil Port, the biggest U.S. oil import terminal, stopped unloading cargoes from tankers yesterday because of the storm. The port may resume operations today, a port official said.
States along the Gulf coast receive more than half of U.S. oil imports and are home to 50 percent of the nation's refining capacity. The region also is the source of 30 percent of U.S. oil production, according to the Minerals Management Service.
Tropical Storms Arlene and Bret formed in June. Arlene made landfall near Pensacola, Florida, on June 11. Oil and natural- gas production was reduced because companies evacuated platforms in the Gulf. Bret made landfall in Mexico on June 29.
Hurricane Ivan
Hurricane Ivan in September damaged production platforms and pipelines in the Gulf. Ivan cut a total of 43.8 million barrels of oil production and 172.3 billion cubic feet of natural-gas output, according to the MMS in June. The Atlantic hurricane season lasts from June through November.
Oil surged to a record last week on concern fuel supplies would be insufficient to meet demand. Output by members of the Organization of Petroleum Exporting Countries rose an average of 130,000 barrels a day in June, a Bloomberg survey showed. The increase left the producer group with little spare oil production capacity.
U.S. crude-oil supplies probably fell 1.5 million barrels in the week ended July 1 from 328.5 million the previous week, according to the median of forecasts by 14 analysts before an Energy Department report tomorrow. The department is scheduled to release its weekly report on petroleum inventories at 10:30 a.m.
In London, the August Brent crude-oil futures contract rose 82 cents, or 1.4 percent, to $59.11 a barrel on the International Petroleum Exchange. Brent touched $59.59 a barrel on June 27, the highest since the contract was introduced in 1988.
Last Updated: July 6, 2005 12:21 EDT
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