Oil drops, Wilma spares Gulf ($59.70/bbl)

Reuters ^ | October 24, 2005

[RWR8189]

LONDON (Reuters) - Oil shed nearly a dollar on Monday, sinking below $60 after Hurricane Wilma bypassed storm-battered U.S. oil and gas facilities in the Gulf of Mexico.

U.S. light crude fell as low as $59.56 a barrel, the lowest since July 28. It was down 93 cents by 0922 GMT to $59.70, reversing a gain of 61 cents on Friday on fears Wilma could hinder the recovery of oil operations in the Gulf.

Prices were 16 percent below the record-high of $70.85 a barrel struck in late August in the wake of Hurricane Katrina.

London Brent crude lost 96 cents to $57.52 a barrel.

"The market has been sold off after the Hurricane headed for Florida instead of the Gulf Coast. So oil production is not affected," said Tony Nunan at Mitsubishi Corp. in Tokyo.

Wilma, after devastating Mexico's Yucatan peninsula, spared oil and gas output in the Gulf Coast. The 22nd named tropical storm, Alpha, posed no danger to Gulf facilities as it soaked Haiti and the Dominican Republic, before weakening.

Some 65.79 percent of the normal 1.5 million barrel-per-day (bpd) of oil production in the Gulf of Mexico was shut on Friday, compared with 64.52 percent on Thursday, the MMS said.

DEMAND

Expectations that high prices will slow oil demand are dampening speculators' appetite, dealers said.

"These concerns also led to a reduction in speculative long positions in the futures market, resulting in less speculative support for spot prices," said Gerard Burg from National Australia Bank in a monthly report.

U.S. data also showed a decline in total oil product demand deepening to 3.2 percent over the past four weeks.

But the price slide may not last as "oil demand is forecast to increase as the northern winter approaches", said Burg.

The UK Meteorological Office has predicted a colder-than-average winter for much of Europe, while forecaster EarthSat said last week the U.S. Northeast, the world's largest heating oil market, would be much colder than last year.

The market also gained supply relief as oil workers in France and Nigeria ended their strikes.

Total's Gonfreville oil refinery, the biggest in France, resumed operations on Saturday after workers agreed on Friday to suspend a month-long strike over wages, one of the factors that had helped prices stay well above $60.

And oil exports from OPEC-member Nigeria's 240,000-bpd Brass River tanker terminal resumed at the weekend after protesting unions reached a deal with Italian energy giant Agip, a unit of ENI, ending a three-day disruption.

[RWR8189]

Light, Sweet Crude Oil

10/24/2005 Session Contract Detail for Dec 5

	Last				59.70
	Open High				60.06
	Open Low				60.06
	High				60.29
	Low				59.56
	Settle				60.63
	Change				-.93
	Open Interest				286900
	Volume				0.00
	Last Updated				10/24/2005 05:26:39

Unleaded Gasoline

10/24/2005 Session Contract Detail for Nov 5

	Last				1.6075
	Open High				1.6300
	Open Low				1.6300
	High				1.6300
	Low				1.6050
	Settle				1.6399
	Change				-.0324
	Open Interest				31282
	Volume				0.00
	Last Updated				10/24/2005 05:25:11

Heating Oil

10/24/2005 Session Contract Detail for Nov 5

	Last				1.8340
	Open High				1.8500
	Open Low				1.8500
	High				1.8500
	Low				1.8340
	Settle				1.8665
	Change				-.0325
	Open Interest				25804
	Volume				0.00
	Last Updated				10/24/2005 05:22:03

[anthraciterabbit]

One thing I notice is that America's love affair with the SUV seems to be dead. Ford and GM have been hurt so bad they might not even want to go on manufacturing the things.

[Solamente]

I had a yen for baked potatoes with butter and sour cream but lost my appetite when I saw the supermarket's price for the butter - $ 5.00 a pound!

[crz]

Keep it coming RWR! You are the best info person on this I have seen on these types of sites!

[q_an_a]

equally important is the fact that Nat. Gas futures are down nearly $2.00 in the past two weeks and below $13.00 again. With the Barnett Shale Gas field coming on line faster each week, gas will continue to drop as DFW people demand their share of the gas market and they are the 800 pound gorilla now...30 Trillion feet waiting to be sold.

[TheRobb7]

"Light, Sweet Crude Oil"

How the !@#$% do they know it's SWEET?

Do they TASTE it or something?

On a more serious note, I've noticed my lib co-workers aren't complaining about gas prices lately, since here in Memphis the price has dipped about 50 cents.

And the Old Media is....quite...silent....about it.....

[azhenfud]

http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp

[John O]

I've still seen lots of commercials for them. The SUV will be here almost forever. Or until they build a good full size station wagon again.

Of course I'm more of a mini-van person myself. More interior volume and cheaper to buy.

[Eagles Talon IV]

"...while forecaster EarthSat said last week the U.S. Northeast, the world's largest heating oil market, would be much colder than last year.

About 10 days ago I heard a report from a forecasting agency that predicted a milder then usual winter in the nation and forecast no particularly cold weather. Maybe a milder winter isn't scary so these people just fling out their opinion in the hopes it will drum up a reaction.

[41Thunder]

Don't bet on SUV's disappearing anytime soon. Toyota is having a banner year and the Highlander, 4Runner and Sequoia are still selling remarkably well in a tough market. With hybrids coming on line, I suspect we'll begin to see many more SUV's equipped with some sort of hybrid drive system like the Toyota Highlander or Ford Escape.

[frogjerk]

One thing I notice is that America's love affair with the SUV seems to be dead.

TWAIN: "The reports of my death have been greatly exaggerated"

[quantfive]

"I've still seen lots of commercials for them. The SUV will be here almost forever. Or until they build a good full size station wagon again."

Demand dropped 25% in the last two months from Ford and GM, Toyota showing 23% decline. I agree, that this drop is preciptious for but not dead. We'll see a revival as more hybrid SUV's are offered that get 35 MPG or above.

[RWR8189]

If you were being serious, it is called "sweet" because of the low sulfur content in the crude oil.

Our refineries do not have ability to correctly refine "sour" or highly sulfuric crude.

[AFPhys]

I am pretty sure that the NWS is predicting just about normal temps for the N.E. US this winter.

[Hilltop]

You do not understand the flow of raw crude from the wellhead to the gas pump, diesel pump or to your local hardware store for benzene or other petroleum distillates.

Separating plants by design, refract sulfur from "sour oil" and then via pipeline or other means it is transported to refineries which make the end product.

You are correct in your definition of "sweet" crude."

Third generation oilfield worker.

[RightWhale]

Having noted the massive and sudden price increases lately at McDonalds I took my business to Burger King last night. Surprise! Not. BK is more than keeping up. This town is on the way to buying back its reputation as a high-priced frontier town.

[Trust but Verify]

Sam's Club.

[TheRobb7]

"it is called "sweet" because of the low sulfur content in the crude oil."

Yes, I had always wondered what they meant by "sweet".

BTW, I like your tagline. It just might become reality. :)

[vigilante2]

they're still having a lot of trouble getting the price down at the pump