Post by Said1 on Sept 27, 2005 5:45:52 GMT -5
I guess Saudi Arabia is picking up the slack despite world shortage warnings.
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Crude Oil Slips; Stockpiles May Accumulate With Refineries Shut
Sept. 27 (Bloomberg) -- Crude oil fell as refineries in Texas and Louisiana shut to repair damage done by Hurricane Rita, enabling the U.S. to build up stockpiles of crude.
Gasoline futures rose on concern plants affected by Rita will take weeks to start up again. The storm shut down almost a quarter of U.S. refining capacity, and another 5 percent remains closed because of Hurricane Katrina. With refineries shut, demand for crude is declining.
``Crude stocks are fairly adequate and there's no sign of any further storms in the Caribbean,'' said Christopher Bellew, a broker with Bache Financial Ltd. in London. ``You would expect to see gasoline and heating oil rather higher as the market struggles'' with refinery shutdowns.
Crude oil for November delivery fell as much as 37 cents, or 0.6 percent, to $65.45 a barrel on the New York Mercantile Exchange, where it was down 16 cents at 9:56 a.m. London time. Oil has dropped 7.3 percent from a record $70.85 on Aug. 30.
October gasoline rose as much as 1.7 percent to $2.1651 a gallon on the Nymex, where it was up 1.53 cents at $2.1445. It has dropped 27 percent since reaching a record $2.92 a gallon at the end of August, after Katrina struck.
Valero Energy Corp., the largest refiner in the U.S., said its Port Arthur, Texas, plant may be closed for as long as four weeks. Six other refineries were hit head-on as Rita made landfall, causing wind and flood damage and cutting power supplies.
``The early relief that Rita passed most facilities by was overdone,'' said Tony Regan, a director and lead consultant at Tri- Zen International Pte in Singapore. Prices are ``going to remain strong for the next few days until we get some reliable information on how the refineries and offshore production are recovering.''
Katrina's Impact
Katrina reached land on Aug. 29, before the U.S. Labor Day weekend, the end of the peak season for gasoline demand. Refiners are preparing now to make heating fuel while replenishing gasoline supplies.
Katrina caused gasoline shortages in the U.S., sending the average price at the pump to a record $3.057 a gallon on Sept. 2, the AAA motorists' group said. The price rose to $2.813 a gallon yesterday from $2.80 on Sept. 23. It has dropped 8 percent from the record.
The U.S. has lost all its oil production in the Gulf of Mexico for the past three days because of Rita, according to the Minerals Management Service. The Gulf usually produces 1.5 million barrels of oil a day, about 30 percent of the nation's total output.
About 78 percent of the region's natural gas production was halted. The Gulf usually accounts for a quarter of the gas the country extracts.
Saudi Plans
Saudi Arabia, the world's largest oil producer, plans to increase output capacity and reserves soon, contrary to expectations the country is running out, Saudi Oil Minister Ali al- Naimi, said today.
The country will add 200 billion barrels to its reserves of 264 billion barrels, al-Naimi said at an industry conference in Johannesburg. Exxon Mobil Corp. President Rex Tillerson said the world may have at least 3 trillion barrels of oil from conventional oil fields, oil sands deposits and other sources.
``A popular theory receiving much attention in the press these days says that the current tightness in the petroleum supply chain is proof that we are rapidly reaching the limits of our ability to produce petroleum,'' al-Naimi said. ``Such talk is not productive because it diverts attention from the real problems ahead. The problem we face is not one of availability, it is a problem of deliverability.''
Brent crude for November settlement fell 13 cents to $63.80 after reaching a record $68.89 on Aug. 30 on London's International Petroleum Exchange.
Sept. 27 (Bloomberg) -- Crude oil fell as refineries in Texas and Louisiana shut to repair damage done by Hurricane Rita, enabling the U.S. to build up stockpiles of crude.
Gasoline futures rose on concern plants affected by Rita will take weeks to start up again. The storm shut down almost a quarter of U.S. refining capacity, and another 5 percent remains closed because of Hurricane Katrina. With refineries shut, demand for crude is declining.
``Crude stocks are fairly adequate and there's no sign of any further storms in the Caribbean,'' said Christopher Bellew, a broker with Bache Financial Ltd. in London. ``You would expect to see gasoline and heating oil rather higher as the market struggles'' with refinery shutdowns.
Crude oil for November delivery fell as much as 37 cents, or 0.6 percent, to $65.45 a barrel on the New York Mercantile Exchange, where it was down 16 cents at 9:56 a.m. London time. Oil has dropped 7.3 percent from a record $70.85 on Aug. 30.
October gasoline rose as much as 1.7 percent to $2.1651 a gallon on the Nymex, where it was up 1.53 cents at $2.1445. It has dropped 27 percent since reaching a record $2.92 a gallon at the end of August, after Katrina struck.
Valero Energy Corp., the largest refiner in the U.S., said its Port Arthur, Texas, plant may be closed for as long as four weeks. Six other refineries were hit head-on as Rita made landfall, causing wind and flood damage and cutting power supplies.
``The early relief that Rita passed most facilities by was overdone,'' said Tony Regan, a director and lead consultant at Tri- Zen International Pte in Singapore. Prices are ``going to remain strong for the next few days until we get some reliable information on how the refineries and offshore production are recovering.''
Katrina's Impact
Katrina reached land on Aug. 29, before the U.S. Labor Day weekend, the end of the peak season for gasoline demand. Refiners are preparing now to make heating fuel while replenishing gasoline supplies.
Katrina caused gasoline shortages in the U.S., sending the average price at the pump to a record $3.057 a gallon on Sept. 2, the AAA motorists' group said. The price rose to $2.813 a gallon yesterday from $2.80 on Sept. 23. It has dropped 8 percent from the record.
The U.S. has lost all its oil production in the Gulf of Mexico for the past three days because of Rita, according to the Minerals Management Service. The Gulf usually produces 1.5 million barrels of oil a day, about 30 percent of the nation's total output.
About 78 percent of the region's natural gas production was halted. The Gulf usually accounts for a quarter of the gas the country extracts.
Saudi Plans
Saudi Arabia, the world's largest oil producer, plans to increase output capacity and reserves soon, contrary to expectations the country is running out, Saudi Oil Minister Ali al- Naimi, said today.
The country will add 200 billion barrels to its reserves of 264 billion barrels, al-Naimi said at an industry conference in Johannesburg. Exxon Mobil Corp. President Rex Tillerson said the world may have at least 3 trillion barrels of oil from conventional oil fields, oil sands deposits and other sources.
``A popular theory receiving much attention in the press these days says that the current tightness in the petroleum supply chain is proof that we are rapidly reaching the limits of our ability to produce petroleum,'' al-Naimi said. ``Such talk is not productive because it diverts attention from the real problems ahead. The problem we face is not one of availability, it is a problem of deliverability.''
Brent crude for November settlement fell 13 cents to $63.80 after reaching a record $68.89 on Aug. 30 on London's International Petroleum Exchange.
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