Oil plummets below US$60

LONDON – Oil shed nearly a dollar yesterday, sinking below US$60 (N$402) after Hurricane Wilma bypassed storm-battered US oil and gas facilities in the Gulf of Mexico.

US light crude fell as low as US$59,56 a barrel, the lowest since July 28. It was down 93 cents by 0922 GMT, reversing a gain of 61 cents on Friday on fears Wilma could hinder the recovery of oil operations in the Gulf.Prices were 16 per cent below the record-high of US$70,85 a barrel struck in late August in the wake of Hurricane Katrina.London Brent crude lost 96 cents to US$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 per cent 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 per cent on Thursday, the MMS said.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.US data also showed a decline in total oil product demand deepening to 3,2 per cent 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 US 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 US$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.- Nampa-ReutersIt was down 93 cents by 0922 GMT, reversing a gain of 61 cents on Friday on fears Wilma could hinder the recovery of oil operations in the Gulf.Prices were 16 per cent below the record-high of US$70,85 a barrel struck in late August in the wake of Hurricane Katrina.London Brent crude lost 96 cents to US$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 per cent 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 per cent on Thursday, the MMS said.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.US data also showed a decline in total oil product demand deepening to 3,2 per cent 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 US 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 US$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.- Nampa-Reuters