Oil falls below $59 after hurricane ($58.74/bbl)

Reuters ^ | July 11, 2005 | Felicia Loo

[RWR8189]

SINGAPORE (Reuters) - Oil prices slid below $59 a barrel on Monday as worries about damage to U.S. oil and gas facilities eased following the passage of Hurricane Dennis.

U.S. crude for August delivery fell 75 cents to $58.88 a barrel, extending losses of $1.10 on Friday. London's Brent crude shed 83 cents to $57.37 a barrel.

"People perceived that the hurricane may not be as damaging as Hurricane Ivan. That's why people are taking profits, but the true extent of the damage is not known yet," said Tony Nunan, a manager at Mitsubishi Corp.'s international energy business.

Hurricane Dennis raced ashore on the U.S. Gulf Coast on Sunday and was heading north after swamping homes and cutting electricity to almost half a million people along the coast.

Before it hit land, Dennis weakened from a powerful Category 4 hurricane to Category 3.

Energy companies were looking to restore the 42 percent of daily oil production and 27 percent of daily natural gas output in the Gulf that was shut as Dennis passed through.

Several producers said they expected to begin restoring Gulf operations, home to 25 percent of U.S. oil and gas production, by Monday.

Traders said crude oil speculators on the New York Mercantile Exchange, who increased their net buying positions in the week ended July 5 to 32,758, were offloading their positions, hitting prices.

In addition, Chinese demand growth is lending less support to oil prices.

The world's second biggest energy consumer after the United States and one of the main drivers of last year's oil price rally, is seeing a sustained slowdown in oil demand growth.

Crude imports into China dipped to 2.7 million barrels per day (bpd) in June from 2.74 million bpd last year as flagging demand and retail price caps prompted refiners to cut processing rates and draw from domestic stockpiles.

China's apparent oil demand had contracted over 4 percent in May from a year earlier as refiners rushed to export oil products, while Sinopec, the country's top refiner, has also been reselling millions of barrels of foreign crude.

[RWR8189]

7/11/05 Session Contract Detail for August 2005

	Last				58.74
	Open High				59.40
	Open Low				59.40
	High				59.50
	Low				54.00
	Settle				59.63
	Change				-0.89
	Open Interest				192495
	Volume				0
	Last Updated				7/11/05 05:15:14

[Conservative Infidel]

Am I the only one who has noticed that this whole oil futures market is turned around bass-ackwards? In the past 5 years, 2 things have caused spikes in oil futures prices - significant terror attacks and possible weather disruptions. Now we have both and the prices actually retreat! WTF??

[millefleur]

Somehow the price of regular was still $2.29 this morning in Wake County, NC.

[Coldwater Creek]

In Memphis not only was it high it went up 20 cents this morning. We are paying at the pump for gas that was bought months ago. One of our boys was a fuel buyer for Fed Ex, It nearly drove him crazy trying to figure out the futures.

Thank goodness he got out of that department.

[Trust but Verify]

It's $2.49/gal in Milwaukee today, having gone up $.22 in one day. It will take a month for us to lose that one day price hike.

[SheLion]

Oil falls below $59 after hurricane ($58.74/bbl)

Gasoline Prices Surge To $2.33 Per Gallon

So what is it?  I'm confused.