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Oil nears 61 as gulf storm gathers again { July 13 2005 } Original Source Link: (May no longer be active)
http://www.cbsnews.com/stories/2005/07/13/ap/business/mainD8BAFAS80.shtmlhttp://www.cbsnews.com/stories/2005/07/13/ap/business/mainD8BAFAS80.shtml
Oil Near $61 As Gulf Storm Gathers Strength
BUDAPEST, Hungary, July 13, 2005
Crude oil futures rose back near $61 a barrel Wednesday as Tropical Storm Emily churned toward storm-battered Gulf of Mexico oil platforms, escalating concerns over supply disruptions ahead of production for winter.
Holding prices back a bit was a report from the International Energy Agency, which lowered its forecast for global demand growth.
The Paris-based agency revised its global demand growth outlook lower by 200,000 barrels a day to 1.58 million barrels a day in 2005, citing a weaker outlook for China and the United States.
Demand is expected to bounce back next year and is projected at 1.75 million barrels a day, with countries outside the Organization for Economic Cooperation and Development driving global demand growth in 2006, according to the IEA report released Wednesday.
The agency also sees the pace of Chinese demand growth in 2006 outstripping this year's level.
Light, sweet crude for August delivery gained 20 cents to $60.82 a barrel on the New York Mercantile Exchange. Nymex crude hit an all-time high of $62.10 a barrel on July 7.
Heating oil was down a cent to $1.7400 a gallon, while gasoline rose by half a cent to $1.7800 a gallon.
On London's International Petroleum Exchange, August Brent rose 22 cents to $59.04 a barrel.
The market was watching Tropical Storm Emily, which steamed toward Barbados in the Caribbean on Tuesday, packing maximum sustained winds of 50 mph, the National Hurricane Center in Miami said.
"If we get a repeat of the huge devastation Hurricane Ivan caused last year, we are going to see prices spike considerably higher, led by fears over product supply," said Orrin Middleton, energy analyst with Barclays Capital in London.
"Given the current market dynamics, we simply cannot afford a repeat of Hurricane Ivan," Middleton said.
"Diesel strength and limited spare capacity has increased consumers' and refiners' desire to hedge forward and demand higher stock holdings, driving up prices," the IEA report said.
U.S. inventory data due later Wednesday also kept markets edgy, as investors expect draws in both crude and gasoline stocks _ a likely result from disruption caused by Emily's predecessor.
Hurricane Dennis rolled through the Gulf of Mexico last week, and while it caused minimal damage to pipelines, oil companies did shut down platforms and evacuated staff.
The U.S. Minerals Management Service said Tuesday that production worth more than 800,000 barrels of crude continued to be locked in refineries due to Dennis. All told, the agency said Dennis forced a halt in production of nearly 5 million barrels of crude from July 8 to July 12.
The agency said normal daily production in the Gulf of Mexico stands at around 1.5 million barrels _ about 30 percent of total U.S. output.
Also, an oil and natural gas platform operated by BP PLC in the Gulf was listing and found to have sustained serious damage that could cut into the company's production for years to come. BP's Thunder Horse platform southwest of New Orleans was set to begin producing in the fourth quarter and immediately help raise output.
The U.S. federal National Oceanic and Atmospheric Administration had predicted in May that there could be between 12 to 15 tropical storms with "seven to nine becoming hurricanes, of which three to five could become major hurricanes."
Oil prices are around 55 percent higher than a year ago, but are still below the all-time inflation-adjusted high of $90 a barrel set in 1980.
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Associated Press Writer En-Lai Yeoh in Singapore contributed to this report.
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