Oil prices rise slightly, near US$70 a barrel

FE Team | Published: August 25, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

LONDO, Aug 24(AP): Oil prices rose Friday as stock markets across Europe recovered earlier losses. Confirmation that the Mexican oil industry was able to avoid major damage during Hurricane Dean also affected prices.
Energy markets had been falling recently despite the threat of hurricanes, with many investors betting that credit might be tightening so much as to stifle growth. Traders worry a slowdown in the U.S. economy will likely hurt energy demand.
But the mood of markets got a boost from data from the U.S. Commerce Department that demand for durable goods surged during July.
Light, sweet crude for October delivery rose 8 cents to US$69.91 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Europe. October Brent crude gained 3 cents to US$69.89 a barrel on the ICE Futures exchange in London.
"With no real signs of a major downturn in demand the market selling was ahead of (itself). What really went on was an aversion to risk as commodity funds offset positions," said Phil Flynn, an analyst with Alaron Trading Corp. in a daily note to clients.
After the passage of Hurricane Dean, state-owned oil monopoly Petroleos Mexicanos said two of the three main oil-exporting ports in the southern Gulf of Mexico were reopened Thursday. The company had previously said some 10.5 million barrels of crude in storage would resume shipping as soon as the ports reopened.
Pemex also said Dean's damage to its rigs was minimal and it expected to reach pre-hurricane levels of oil production by next week. More than 18,000 workers evacuated ahead of the storm were to return to work on platforms in the Bay of Campeche by Friday.
Some oil analysts have said there were concerns in the market about weakening demand in the coming weeks or months, with the winding down of the summer peak driving season and predictions the Northern Hemisphere winter could be a mild one.
But supplies of crude oil and gasoline are much tighter, and gasoline demand, despite all of the market's jitters about the consumer, was at an all-time high last week, according to U.S. Energy Department data. So if another Atlantic hurricane does veer toward the U.S. oil facilities scattered along the Gulf Coast, investors who took their money out of the energy markets to make up for losses elsewhere might feel inclined to put it back in - which could eventually mean higher gasoline prices for consumers.
Gasoline prices fell 0.14 cent to US$1.9218 a gallon on the Nymex, while heating oil futures dropped 0.50 cent to US$1.9560 a gallon (3.8 liters). Natural gas prices fell 4.7 cents to US$5.575 per 1,000 cubic feet.
In other news, a pipeline official said Russian oil supplies to Germany have dropped by as much as one-third, sharply pinching supplies at a major German refinery.
Sergei Grigoriev, a top executive with Russia's state-controlled pipeline operator OAO Transneft, blamed oil giant OAO Lukoil and several smaller oil companies.
"The reduction was evident last month and this month," Grigoriev told Dow Jones Newswires.
A Lukoil spokesman declined to comment, but said a statement would be released in coming days. Meanwhile, a spokesman for the Schwedt refinery confirmed that the plant in eastern Germany has seen disruptions in supplies from Russia since July.