Posted on 08/29/2006 7:07:13 AM PDT by shrinkermd
LONDON (AP) -- Oil prices fell below $70 a barrel Tuesday as Tropical Storm Ernesto veered away from the oil and gas region of the Gulf of Mexico, easing concern that output would be disrupted. Light sweet crude for October delivery on the New York Mercantile Exchange fell 85 cents to $69.76 a barrel in electronic trading by afternoon in Europe. It last traded below $70 on Aug. 18.
The fall extended a $1.90 drop on Monday, when it settled at $70.61.
October Brent crude at London's ICE Futures exchange dropped 86 cents to $69.96 a barrel.
Royal Dutch Shell PLC said it plans to return workers to rigs and platforms in the Gulf of Mexico after Ernesto, which struck southern Cuba yesterday, moved northeast on its way to Florida and South Carolina. That means the storm will bypass the eastern and central gulf, where most U.S. offshore oil and natural-gas facilities are located.
Concerns about threats to supply were further eased when BP PLC said it had restored output from its Prudhoe Bay field in Alaska to about 200,000 barrels a day, half the daily production capacity.
The partial production shutdown at the giant Prudhoe Bay field in the U.S. state of Alaska is expected to make an impact on U.S. oil inventory statistics due Wednesday.
U.S. commercial crude stocks are expected to have fallen by an average 1.2 million barrels in the week to Aug. 25, a Dow Jones Newswires survey of eight analysts showed.
Gasoline inventories likely drew 900,000 barrels as the country approaches the end of the summer driving season, while distillate stocks, comprising heating oil and diesel, probably rose 1.2 million barrels, the survey showed.
Traders also remain watchful of other market movers, such as Iran's stand-off with the West over its nuclear program.
Traders are concerned that Iran, the world's fourth-biggest oil producer, could block oil exports if the United Nations imposes sanctions over its nuclear program. Tehran faces a Wednesday deadline to halt uranium enrichment or face possible economic and diplomatic sanctions, but has so far refused any immediate suspension of its nuclear program.
"Moving in the international framework is not a matter of concern for us," government spokesman Gholam Hossein Elham said Monday.
Iran is a leading global oil exporter and has made threats in recent months to choke off the Strait of Hormuz -- where some 20 percent of the world's supply passes through every day -- in retaliation for sanctions.
In other Nymex trading, natural gas futures declined 28.2 cents to $6.190 per 1,000 cubic feet, while gasoline futures rose marginally to $1.7910 a gallon, and heating oil futures rose 0.1 cent to $1.9660 a gallon.
That and some of the futures contracts are coming do.
It's Bush fault when it goes up, but silence when it goes down.
Well, it doesn't have to be that way. If the libs would let us drill out there, too....
The air is finally leaking out of the oil bubble.
It's okay for Castro to drill in the Gulf, but not US..............
Gas prices in this part of N California in many stations during the weekend went down to $2.95/gallon for unleaded.
The prices have been over $3/gallon for about 2 months.
Gasoline prices were set to drop anyway due to the end of the driving season. This will further depress the price of a gallon of gasoline.
Lower gasoline prices will cause great distress among the libs.
BUSH'S FAULT!!
The above was brought to you by Akorahil's sarcasm. Sarcasm-when just bringing up a point isn't poignant enough.
Now would be a good time to lock in your home heating oil rates for the coming winter. Not gonna get much lower this time around...
This is not what the Dems need as we approach November!
Paid 3.07 a month ago here in IN
paid 2.60 yesterday
There has got to be bad news in here somewhere. There's just GOT to be. (/Bush Derangement Syndrome)
Opening offshore, ANWAR and introduction of more biodiesel vehicles will help cut back on OPEC dependence.
$2.43 this morning in Des Moines.
Nope. Not with Ahmanutjob out there.
That old End of Vacation and Boating Season thing happens every year when the crumb-crunchers go back to skool
I think the Iranians shot their load with the Hezzies in Lebanon.
I don't think the speculators are taking this into account anymore. Oil will drop to 60 by October nd 50 by the end of the year, nukes or no nukes.
Also, they need to switch over to the winter blends, as well as the ramp up in price for the winter heating oil run. So you're right, plenty of opportunity for it to go right back up.
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