"Crude" News
BUDAPEST, Hungary, Jun 13, 2005 (AP Online via COMTEX) -- Crude futures fell but held above $53 a barrel Monday as fears of tropical storm Arlene causing supply disruptions waned and traders looked ahead to this week's OPEC meeting. The first big storm of the season in the Gulf of Mexico had caused only minimal damage to oil refinery operations.
Investors are looking much more closely at inventory data from the United States after last week's unexpected drop in crude stocks caught markets unaware, said Orrin Middleton, energy analyst at Barclays Capital in London.
"There is a general sentiment that there are more draws to come, as refineries are already running at nearly full capacities," Middleton said.
Light, sweet crude for July fell 13 cents to $53.41 a barrel in electronic trading on the New York Mercantile Exchange.
Heating oil prices fell marginally to $1.6067 a gallon and unleaded gas slipped nearly a cent to $1.5355 a gallon.
On London's International Petroleum Exchange, July Brent rose 21 cents to $52.88 a barrel.
Arlene forced oil and gas companies in the Gulf of Mexico to evacuate workers from offshore rigs and halt some production last week. The threat that the storm would damage oil rigs caused prices to spike Friday, nearly hitting $55 a barrel.
The halted production totaled about 25,500 barrels per day, or about 1.74 percent of total output, the U.S. government said. The Gulf of Mexico accounts for a quarter of total oil and gas output in the United States.
"But the market ... is correcting downward as it turned out the impact of Arlene has been minimal, since no refinery operations have really been affected," said Victor Shum, oil analyst at Texas-based energy consultants Purvin & Gertz in Singapore.
Last year, Hurricane Ivan forced oil platforms across the Gulf of Mexico to shut down, causing production bottlenecks and sending prices up as the Northern Hemisphere was gearing up for winter heating oil production.
The Organization of Petroleum Exporting Countries, which accounts for 40 percent of global production, meets Wednesday in Vienna, Austria. Some oil ministers have mentioned the possibility of a 500,000-barrel-a-day increase in the group's official production quota.
Saudi Arabian Oil Minister Ali Naimi had said Saturday that he backed an increase in the production ceiling but questioned whether demand justified adding actual oil to the market.
OPEC already is producing above the quota and some analysts believe that raising the ceiling would not translate into more production.
Even so, the outcome of the OPEC meeting is likely to help stabilize the oil market, the chief executive of Malaysia's state-owned Petronas said Monday.
"I think OPEC will play its role to stabilize prices on the supply side," said Hassan Marican. Malaysia is not a member of OPEC.