Oil Ends Above $47; High for Month
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Crude oil futures settled at a month high yesterday, topping $47 a barrel as concerns grew over the slower-than-expected recovery of oil production in the Gulf of Mexico following Hurricane Ivan.
Gains in heating oil futures, which leapt to their highest mark in 19 months – within a cent of their record high – also helped drive crude’s rise.
Little progress was made overnight in restoring Gulf oil production, said the U.S. Department of Interior’s Minerals Management Service in a report released Tuesday afternoon.
About 666,000 barrels a day of oil still are off-line, down from 700,000 barrels a day Monday, according to the Minerals Management Service. Traders had expected a faster recovery, given initial reports of only light damage.
“Hurricane Ivan may have done more damage to oil production platforms and refineries than was originally let on,” said Phil Flynn, a broker for Alaron Trading Corp., a Chicago brokerage. “We could be being fairly conservative in our estimates.”
The benchmark October light, sweet, crude futures contract, which expired Tuesday, settled at $47.10 a barrel, up 75 cents, on the New York Mercantile Exchange.
Crude hasn’t closed above $47 since August 20, the day it posted its all-time intraday high of $49.40 a barrel.
The higher-volume November crude contract ended at $46.76 a barrel, up 57 cents, on the Nymex.
In London, November Brent blend crude oil futures settled at $43.39 a barrel, up 48 cents on the International Petroleum Exchange.
Nymex heating oil futures for October climbed 3.70 cents to $1.3029 a gallon, marking the highest price seen in a front month since February 28, 2003, when they settled at $1.3130 ahead of the U.S.-led war in Iraq.
With winter approaching, traders said they were sharpening their focus on U.S. heating oil inventories and keeping a watchful eye on tight stocks in Europe.
Like crude, Nymex gasoline futures for October also settled at a month high, up 1.51 cents to $1.2896 a gallon.
Widespread expectations of big draws in U.S. commercial crude and product inventories in the wake of Ivan also helped undergird prices yesterday.
Many market participants believe government and industry data due out today will provide the first clear snapshot of Ivan’s impact on the energy industry.
