The New York Times: Oil Rises as Hurricane Heads Toward U.S. (ShellNews.net)
By REUTERS
September 14, 2004
Filed at 5:16 a.m. ET
SINGAPORE (Reuters) - World oil prices rose on Tuesday as Hurricane Ivan charged toward the oil-rich Gulf of Mexico, where energy companies had evacuated thousands of offshore workers and shut some production.
Prices were also underpinned by another sabotage attack on a pipeline in northern Iraq that has halted Iraqi crude exports from the Turkish Mediterranean port Ceyhan.
U.S. light crude climbed 48 cents to $44.35 a barrel. London's Brent crude rose 49 cents to $41.55 a barrel.
Ivan, one of the fiercest Atlantic storms on record, was heading into the Gulf of Mexico on Tuesday, home to about a quarter of U.S. oil and gas output.
Shell Oil Co. closed 272,000 barrels per day (bpd) of oil output and ChevronTexaco Corp., ExxonMobil Corp. and Total SA also shut some production as companies evacuated more than 3,000 workers as a precaution.
Although Ivan is not expected to directly hit the bulk of output in the gulf, relatively low fuel stocks in the world's biggest energy consumer has left traders nervous about any hiccup in the supply chain.
``U.S. crude inventories have been drawing down as we head into winter, any headline on supply interruptions will push the market up,'' said Tony Nunan, a general manager at Mitsubishi Corp. in Tokyo.
Official U.S. data has shown that national crude stocks have fallen more than six percent in the past two months to the lowest level since March.
SAUDI WANTS PRICES BELOW $40
Saboteurs blew up an oil pipeline in northern Iraq on Tuesday, knocking out 200,000-300,000 bpd of crude exports from the northern Kirkuk oilfields. The crude was being pumped to Turkey through a back-up pipeline after an attack on the main northern export line on Sept. 2.
A pipeline in the south was bombed on Monday, although an oil official said the attack had not affected southern exports, which were running at about 1.9 million bpd.
Sabotage on Iraqi oil infrastructure and potential for other supply disruptions at a time when producers are almost fully stretched to meet roaring demand have pumped oil prices to record highs this year at almost $50 a barrel for U.S. crude.
Top exporter Saudi Arabia said on Tuesday Riyadh wanted prices below $40 a barrel and it would keep pumping at 9.5 million bpd in October in an effort to bring the market down.
Ministers of the Organization of the Petroleum Exporting Countries, which controls more than half of world crude exports, will meet to review policy in Vienna on Wednesday.
Asked whether Riyadh would be content to see prices at $40 a barrel, Saudi Oil Minister Ali al-Naimi said: ``No, $40 is not low enough ... the fundamentals do not support this price and OPEC does not support this price.''
Naimi said OPEC was pumping 2 million bpd over the formal ceiling of 26 million bpd and he saw no reason for the cartel to raise formal quotas to reflect actual production. Iraq is not included in OPEC's quota system.
But Kuwait said it would support an increase in OPEC's official output ceiling by 500,000 bpd to help calm the market.
Any OPEC agreement is unlikely to have any immediate impact on supply levels because all in OPEC, bar Saudi Arabia, are pumping at full capacity.
http://www.nytimes.com/reuters/business/business-markets-oil.html