By OGJ editors
HOUSTON, July 18 -- Crude oil prices rose July 15, reflecting supply concerns as Hurricane Emily was predicted to hit Mexico's Yucatan peninsula and then enter the Gulf of Mexico.
The storm was reported on July 18 to be closing in on Yucatan and possibly Cantarell oil field. Meanwhile, some oil companies were evacuating rigs in the US Gulf of Mexico as a precaution. Hurricane Emily comes on the heels of Hurricane Dennis.
Oil demand
In its Oil Market Report for July, the International Energy Agency on July 13 revised its world oil demand growth downward by 200,000 b/d to 1.58 million b/d in 2005 due to a weaker outlook for China and the US.
"China's price restrictions on transport fuels and power are making it uneconomic for domestic refiners and utilities to maximize output, therefore inhibiting demand. Any liberalization of either market has the potential to increase domestic oil demand," the IEA said. "However, so far there is no sign of this happening and anecdotal indications suggest a weak start to apparent Chinese demand in the third quarter."
The IEA forecast accelerating non-OPEC supply, which in 2006 is expected to average 52.4 million b/d vs. 51 million b/d in 2005.
"High prices may be leading to increased upstream activity levels," IEA said.
Energy prices
The August contract for benchmark US light, sweet crudes rose 29¢ to $58.09/bbl on July 15. The September contract rose 43¢ to $59.13/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., rose 29¢ to $58.10/bbl. Heating oil for August edged up 0.52¢ to $1.6621/gal on NYMEX. Gasoline for the same month dropped 0.52¢ to $1.6883/gal.
The August natural gas contract ended slightly higher, up 0.5¢ to $7.849/MMbtu on NYMEX. Gas prices experienced a slim gain on warmer weather forecasts and concerns about Hurricane Emily, said analysts at Enerfax Daily.
In London, the expiring August contract for North Sea Brent crude rose 65¢ to $57.61/bbl on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes fell by 93¢ to $52.44/bbl July 15.
