VIENNA, Austria, 24 August 2005 — Oil futures held above $65 a barrel yesterday amid lingering global supply concerns. The rise came amid expectations that today’s US petroleum inventories will show declines in both crude and gasoline stocks with little indication that high prices are slowing demand.
A new tropical storm heading toward the Gulf of Mexico had added to worries. But the storm weakened to a tropical depression by yesterday and analysts had cautioned against overemphasizing its effect on the market, saying such weather was widely expected this time of year.
Light, sweet crude for October delivery on the New York Mercantile Exchange rose 15 cents to $65.80 a barrel by afternoon. Nymex crude reached an all-time high of $67.10 a barrel Aug. 12. Prices are around 40 percent higher than a year ago, and the Global Center for Energy Studies, warned yesterday that it could keep climbing. “Rising global oil demand is continuing to put pressure on the industry’s ability to supply enough oil,” the London-based resources institute said in its latest report.
The world’s daily diet of crude is expected to average around 83 million barrels in the current third quarter before spiking to 85.5 million barrels a day in the fourth quarter of 2005 during winter, the report said. With the end of the American summer driving season looming, analysts are now watching winter demand for distillates - heating oil, diesel and jet fuel - when consumption of the commodities rise.
Nymex heating oil rose less than a cent to $1.82 a gallon while gasoline fell more than a penny to $1.851 a gallon. On London’s International Petroleum Exchange, October Brent crude rose 29 cents to $64.79 a barrel.
Today, the US Department of Energy will release its weekly petroleum data snapshot, an indicator of demand from the world’s largest energy user. Analysts surveyed by Dow Jones Newswires predicted that gasoline stocks will fall by a million barrels from a week ago, while crude probably fell by 255,000 barrels.
Meanwhile, Tropical Storm Jose formed and began to pick up strength late Monday, heading for Mexico’s Gulf coast as the active Atlantic hurricane season continued to roil oil markets.
Hurricanes have forced rig and production shutdowns on both the US and Mexican sides of the Gulf, hurting supply.
