By OGJ editors
HOUSTON, Oct. 11 -- Crude futures prices fell during earlier trading Oct. 10 in the New York market but rallied to finish at a small loss after Merrill Lynch officials said the apparent drop in energy demand is but a short-term reaction to recently high prices.
Economic growth remains "reasonably good" although under pressure from higher interest rates and higher oil prices, said Bob Doll, president and chief investment officer of Merrill Lynch Investment Managers.
ConocoPhillips Chairman and Chief Executive Officer James Mulva said Oct. 11 that he expects the company's Lake Charles, La., refinery to be operating by the end of this week. He added that limited start-up might occur late this year at the company's 247,000 b/d Alliance refinery in Belle Chasse, La., which was damaged by Hurricane Katrina.
Red Cavaney, president and chief executive officer of the American Petroleum Institute, said that it's too early to assess storm-related damage to offshore pipelines and that oil companies are working closely with US Minerals Management Service to make assessments.
David A. Trice, chairman, president, and chief executive of Newfield Exploration Co., described storm effects as "a severe blow to Gulf of Mexico infrastructure." He praised workers for "a great job of repairing damage" and for finding "creative ways to flow oil and gas to shore," but added, "A reduced and damaged rig fleet will create challenges for all of us as we move forward."
Since Hurricane Rita, Newfield has restored 60 MMcfd of gas equivalent out of its net gulf production of 320 MMcfd of gas equivalent. Only 14 MMcfd net is associated with lost platforms or structures; the rest is related to damage to host platforms, pipeline infrastructure, and onshore processing facilities. Newfield estimates up to 220 MMcfd of shut-in gas-equivalent production could resume within the next month if the infrastructure is in condition.
Vintage Petroleum Inc. said all but 1,100 b/d of its oil-equivalent output, or 1.5% of its net daily volume produced in the second quarter, will be returned to production by the end of October.
Dominion, based in Richmond, Va., reported its Gulf of Mexico and South Louisiana production has reached 130 MMcfd of natural gas equivalent, with 570 MMcfd of gas equivalent still shut-in primarily because of hurricane damage to third-party downstream facilities.
The November contract for benchmark US sweet, light crudes traded at $60.35-62.44/bbl Oct. 10 before settling at $61.80/bbl, down just 4¢ for the day on the New York Mercantile Exchange. The December contract dipped 5¢ to finish at $61.57/bbl after an equally volatile session. On the US spot market, West Texas Intermediate, at Cushing, Okla., slipped by 3¢ to $61.81/bbl. Gasoline for November delivery lost 2.86¢ to $1.80/gal on NYMEX, but heating oil for the same month gained 1.17¢ to $1.97/gal.
The November natural gas contract fell by 25.1¢ to $12.98/MMbtu on NYMEX, "undermined by milder weather forecasts this week and technical selling after last week's slide," said analysts at Enerfax Daily.
In London, the November contract for North Sea Brent crude dropped 43¢ to $58.78/bbl on the International Petroleum Exchange. Gas oil for October fell $1.25 to $593.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes declined by 55¢ to $53.72/bbl Oct. 10.
Contact Sam Fletcher at [email protected].