World
 
|
Oil prices tumble as US storm fears ease
AFP
NEW YORK
Petroleumworld.com 08 30 06
Oil prices fell under 70 dollars a barrel Tuesday as fears receded that tropical storm Ernesto would damage US Gulf coast oil facilities, traders said.
New York's main contract, light sweet crude for delivery in October, closed down 90 cents at 69.71 dollars per barrel after earlier falling as low as 69.30 dollars, its weakest level since June 21.
In London, Brent North Sea crude for October delivery settled 75 cents lower at 69.86 dollars per barrel. The London contract had earlier tumbled as low as 69.48 dollars, its lowest leve in just over one month.
Oil futures had closed down almost two dollars on Monday after Hurricane Ernesto was downgraded to a tropical storm, reducing concerns about potential damage to US oil installations in the Gulf of Mexico.
The National Hurricane Center forecast Tuesday that Ernesto would hit southern Florida late Tuesday or early Wednesday morning, but that it was not expected to regain hurricane strength.
"As the nation remembers the anniversary of (Hurricane) Katrina, a storm that devastated the Gulf coast, the latest turn of Ernesto has the energy complex for now breathing a big sigh of relief," said Alaron Trading analyst Phil Flynn.
"Traders who staked their energy fortunes on the path of Ernesto got blown away when Ernesto took a merciful turn away from key refining and producing regions," he said.
Traders' nerves were was also soothed by confirmation that BP had resumed improved output at Alaska's giant Prudhoe Bay oil field.
The British energy group had partially shut down the field earlier this month after discovering a pipeline leak, a move which sent crude oil prices soaring to record highs as Prudhoe Bay accounts for 8.0 percent of US oil output.
According to a BP spokesman, the company was now pumping some 200,000 barrels per day (bpd), or around half the field's normal production of 400,000 bpd.
BP, which is facing a range of separate US probes related to a refinery explosion and its energy trading practices, had last week slashed output at the troubled field to about a quarter of its normal level because of technical problems.
Prices also weakened amid an apparent willingness by Iran to negotiate over its disputed nuclear programme.
Analysts warn that Iran, the world's fourth biggest producer of crude, could disrupt its oil exports significantly if hit by UN-backed economic sanctions over the programme.
In line with a UN Security Council resolution, the United States and its European allies are insisting that Iran must stop enriching uranium by August 31 or face the threat of sanctions.
Washington accuses Tehran of seeking a nuclear bomb, but Iran insists its nuclear programme is peaceful.
Meanwhile in Iran's neighbour Iraq, at least 74 people were killed on Tuesday when an old fuel pipeline caught fire near the southern Iraqi city of Diwaniyah, officials said.
Traders added that they would be awaiting a fresh weekly update on US energy inventories Wednesday morning.
AFP 29 2010 GMT 08 06
Copyright ©2006 AFP. All Rights Reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels