MARKET WATCHCrude futures prices inch up as storm strengthens

Aug. 24, 2005
Crude futures prices continued to inch up Aug. 23 as traders worried about storms in the Gulf of Mexico and tight supplies.

Sam Fletcher
Senior Writer

HOUSTON, Aug. 24 -- Crude futures prices continued to inch up Aug. 23 as traders worried about storms in the Gulf of Mexico and tight supplies.

Katrina, the 11th named tropical storm in this hurricane season, was reported some 200 miles east-southeast of Florida early on Aug. 24, moving northwest at 8 mph. It was expected to pick up speed later in the day.

The storm is expected to move across the Bahamas and southern Florida and then reenter the gulf by this weekend. However, forecasters said it's too early to predict Katrina's path accurately.

Foreign supplies
Protesters, whose attacks last week choked off crude exports from Ecuador, were expected to end that crisis Aug. 24 by signing an agreement with private energy companies. The protestors want the government to make foreign oil companies build roads and clean up environmental damage in the Sucumbios and Orellana provinces.

Although crude exports from Ecuador are still paralyzed, the state oil company, Petroecuador, said its production was back to 105,198 b/d, a little more than half of its previous output. Output from private companies in Ecuador totaled 311,827 b/d on Aug. 24, down from 329,000 b/d before the crisis. Meanwhile, Ecuadorean Energy Minister Ivan Rodriguez said some oil wells may have been permanently damaged and unable to be brought back on stream at previous production rates.

Meanwhile, Iraq resumed oil exports Aug. 23 but at half its previous rate of 1.25 million b/d. Exports were halted early this week because of a power outage that was blamed on sabotage.

US stocks
The Energy Information Administration said Aug. 24 that commercial US crude inventories climbed by 1.8 million bbl to 322.9 million bbl in the week ended Aug. 19. US distillate fuel stocks increased by 1.4 million bbl to 132.5 million bbl in the same period, with most of that gain in heating oil and a slight increase of diesel. However, gasoline inventories plunged by 3.2 million bbl to 194.9 million bbl, at the bottom end of its average range.

Imports of crude into the US increased by 272,000 b/d to 10.6 million b/d during the same period. Input of crude into US refineries was up by 35,000 b/d to nearly 15.7 million b/d, with refineries operating at 93.4% of capacity.

Energy prices
The October contract for benchmark US light, sweet crudes inched up by 6¢ to $65.71/bbl Aug. 23 on the New York Mercantile Exchange. The November contract gained 20¢ to $66.48/bbl. On the US spot market, however, West Texas Intermediate at Cushing, Okla., lost 9¢ to $65.37/bbl. Heating oil for September delivery rose by 0.78¢ to $1.82/gal on NYMEX, but gasoline for the same month dipped by 0.36¢ to $1.86/gal. The September natural gas contract bumped up by 11.9¢ to $9.68/MMbtu.

In London, the October contract for North Sea Brent crude increased by 15¢ to $64.65/bbl. Gas oil for September dropped by $5 to $587.75/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes increased by 5¢ to $58.15/bbl on Aug. 23.

Contact Sam Fletcher at [email protected]