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Oil rises on expected drop in supplies
Source: Agencies |
September 14, 2011, Wednesday
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OIL prices rose yesterday on the anticipation that a recent tropical storm caused a major disruption in supplies.
The government will report petroleum supply levels today. According to a poll by Platts, the energy information arm of McGraw-Hill Cos., the storm likely cut US supplies last week by 2.9 million barrels of oil and 400,000 barrels of gasoline.
Tropical Storm Lee hammered the Gulf Coast earlier this month, forcing oil platforms and refineries to temporarily shut down. US regulators said nearly 900,000 barrels of daily oil production were idled in the Gulf while the storm passed over.
Benchmark West Texas Intermediate crude added US$2.02 to finish at US$90.21 per barrel in New York.
Oil has slipped from three-year highs during the past several months as economic growth slowed down in industrialized countries. Economists say high US unemployment and European debt will further cool off energy demand this year, though the world is still on track to consume a record amount of oil.
Most of the increases come from parts of Asia and the Middle East, where developing nations have been rapidly building new factories and roads.
The story is much different in the US A weekly survey by MasterCard SpendingPulse said American drivers have cut back on gasoline purchases for 25 consecutive weeks.
SpendingPulse, which collects credit card data from thousands of stations around the country, said yesterday that drivers bought a four-week average of 374 million gallons per day for the week ending on Sept. 9, down 2.7 percent from the same period last year.
The sustained decline in American driving means oil prices are headed lower, analyst and trader Stephen Schork said. The summer driving season has ended with a whimper, and as the weather cools, "demand is going to continue to suffer," Schork said.
The International Energy Agency joined other major energy agencies yesterday in cutting demand expectations even further. The Paris group lowered its demand forecast by 200,000 barrels per day in 2011 and 400,000 barrels per day in 2012. It also expects Libya to export oil again this year as rebels gained further control of the country.
"There are certainly growing concerns about the health of the global economy," IEA said in its September report.
Brent crude, which is used often to price oil in foreign countries, lost 42 cents to finish at US$109.77 per barrel in London.
In other commodities trading, heating oil gave up 1.14 cents to finish at US$2.9361 per gallon and gasoline futures added less than a penny to end at US$2.7424 per gallon. Natural gas rose 9.5 cents to finish at US$3.98 per 1,000 cubic feet.
The government will report petroleum supply levels today. According to a poll by Platts, the energy information arm of McGraw-Hill Cos., the storm likely cut US supplies last week by 2.9 million barrels of oil and 400,000 barrels of gasoline.
Tropical Storm Lee hammered the Gulf Coast earlier this month, forcing oil platforms and refineries to temporarily shut down. US regulators said nearly 900,000 barrels of daily oil production were idled in the Gulf while the storm passed over.
Benchmark West Texas Intermediate crude added US$2.02 to finish at US$90.21 per barrel in New York.
Oil has slipped from three-year highs during the past several months as economic growth slowed down in industrialized countries. Economists say high US unemployment and European debt will further cool off energy demand this year, though the world is still on track to consume a record amount of oil.
Most of the increases come from parts of Asia and the Middle East, where developing nations have been rapidly building new factories and roads.
The story is much different in the US A weekly survey by MasterCard SpendingPulse said American drivers have cut back on gasoline purchases for 25 consecutive weeks.
SpendingPulse, which collects credit card data from thousands of stations around the country, said yesterday that drivers bought a four-week average of 374 million gallons per day for the week ending on Sept. 9, down 2.7 percent from the same period last year.
The sustained decline in American driving means oil prices are headed lower, analyst and trader Stephen Schork said. The summer driving season has ended with a whimper, and as the weather cools, "demand is going to continue to suffer," Schork said.
The International Energy Agency joined other major energy agencies yesterday in cutting demand expectations even further. The Paris group lowered its demand forecast by 200,000 barrels per day in 2011 and 400,000 barrels per day in 2012. It also expects Libya to export oil again this year as rebels gained further control of the country.
"There are certainly growing concerns about the health of the global economy," IEA said in its September report.
Brent crude, which is used often to price oil in foreign countries, lost 42 cents to finish at US$109.77 per barrel in London.
In other commodities trading, heating oil gave up 1.14 cents to finish at US$2.9361 per gallon and gasoline futures added less than a penny to end at US$2.7424 per gallon. Natural gas rose 9.5 cents to finish at US$3.98 per 1,000 cubic feet.
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