Crude Oil Futures Open Week Higher
Associated Press | July 18, 2005
Crude oil futures opened the week higher Monday as oil companies in Mexico's Yutacan peninsula evacuated workers and began to brace for Hurricane Emily's onslaught as it howled its way towards key oilfields that supply the United States.
In Iraq, oil workers walked off the job on Sunday, which could likely affect much-needed export revenue for the war-tattered nation and hurt global supply.
Midmorning in Singapore, light, sweet crude for August delivery rose 73 cents in active trade to $58.82 a barrel before easing slightly to $58.65. Friday's closing price in New York was $58.09, more than $4 below its record intraday price of $62.10 set July 7.
Still, prices remain more than 40 percent higher compared to a year ago.
In other Nymex products, heating oil rose a penny to $1.6725 a gallon while gasoline was also up, at $1.6885 a gallon.
At the forefront of traders' fears was Hurricane Emily, now packing sustained winds of 145 mph, and closing in on Yutacan and the giant Cantarell oil field after slicing through the Caribbean. A direct hit could instantly cut off around 3 percent of the global diet of 84 million barrels daily, analysts said.
While forecasters predict the storm would not smash into U.S. rigs in the Gulf of Mexico, responsible for around 30 percent of total American output, many oil companies were shutting down platforms as a precaution, and that was expected to disrupt the supply flow.
Shell Oil Co. abandoned three offshore facilities, suspending output of around 1,000 barrels daily and halting 20 million cubic feet of gas production. Mexico's state oil company, Petroleos Mexicanos, meanwhile, has evacuated its Bay of Campeche staff on offshore rigs and closed its taps.
"While there will be some fluctuation in intensity as Emily approaches the Yucatan, the storm will largely be in a favorable environment until landfall near Cozumel, Mexico later tonight," weather trackers Accuweather said.
Petroleos Mexicanos exports 80 percent of its 3.4 million barrels worth of daily production to the United States, the world's largest consumer of energy. Dow Jones Newswires reported it had earlier suspended production amounting to nearly half a million barrels of crude.
The young 2005 Atlantic hurricane season has been unusually active, and analysts are warning there are more to follow Emily and the earlier Hurricane Dennis.
Last year's Hurricane Ivan hurt output and pushed prices upward after it damaged pipelines and oil rigs.
Elsewhere, Iraqi oil workers from its key southern oil fields went on strike, demanding better pay and warning that more labor action could follow.
"Today's strike is peaceful, but if the central government in Baghdad doesn't meet the demands of oil workers, oil production and exports from the south will be terminated," said Samir Jassim, a spokesman for the state-owned South Oil Co.
Production was not immediately affected, he said.