Oil Futures Hold Steady Below $60 a Barrel ($59.57/bbl)

Associated Press ^ | November 2, 2005 | Christopher Torchia

[RWR8189]

SINGAPORE (AP) -- Crude oil prices held steady just below US$60 a barrel on Wednesday after predictions of warmer weather in the United States sparked a big drop two days earlier. Market experts said prospects for rising demand could keep prices at current levels.

Light, sweet crude for December delivery gained 5 cent to US$59.90 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract rose 9 cents to settle at $59.85 a barrel on the New York Mercantile Exchange, where a day earlier they had fallen nearly US$1.50 to a level about 15 percent below the Aug. 30 intraday peak of US$70.85.

Heating oil gained slightly to US$1.8086 a gallon (3.8 liters) while gasoline also edged up to US$1.6070.

On London's ICE Futures exchange, formerly known as the International Petroleum Exchange, December Brent futures inched up 1 cents to US$58.38.

Some U.S. market experts said the weakness in demand didn't mean prices would fall further, noting robust economic growth and expected high demand in 2006.

The weather in the U.S. Northeast and Midwest is viewed as a gauge of demand for home-heating fuels such as natural gas and heating oil. If the weather is warmer than usual, that will ease pressure on producers in the Gulf of Mexico that are still recovering from hurricanes Katrina and Rita.

"The post-hurricane price effects really hit a nerve with consumers and it's affected market psychology as well," says Jim Burkhard at Cambridge Energy Research Associates. "But we're not likely to see the same degree of demand destruction in the next few months."

Analysts say oil demand that's been absent in recent weeks will return as refineries struck by the hurricanes recover, as increased fuel production could limit unwelcome price leaps and encourage consumption.

Still, recovery efforts have been slow. The U.S. Minerals Management Service said Tuesday that 67 percent of daily oil production and 53 percent of natural gas production in the Gulf of Mexico remained off-line, slightly lower than Monday. Oil prices are still about 20 percent higher than a year ago.

With oil prices surging, Saudi Arabia is poised to finish the year with a 54 percent increase in oil revenue and a budget surplus of US$55.5 billion (euro46.2 billion), a Riyadh bank reported.

It will be the second straight year that the kingdom enjoys record oil revenues. The high prices that produced this year's windfall were driven by hurricanes and the limited spare capacity among producers, the Samba Financial Group said in a report made available in Dubai.

In Washington, top executives of three major oil companies will be asked by senators next week why some of their industry's estimated US$96 billion (euro80 billion) in record profits this year shouldn't be used to help people having trouble paying their energy bills.

Lee Raymond, chairman of Exxon Mobil Corp., Jim Mulva, chief executive of ConocoPhillips, and John Hofmeister, president of the U.S. unit of Royal Dutch Shell PLC, will be among the industry executives to be questioned at a Senate hearing, according to congressional and industry officials.

[gogeo]

Thank you, my thought exactly.

[SunkenCiv]

Note: this topic is from 11/02/2005. I tanked up the car at $3.429 tonight, which works out as $144.018 a barrel (rolls in refining, transporation, and distribution, along with the whole earning a living thing).