11 July 2005, 10:17  Oil prices fall in Asian trade after hurricane misses US refineries

Oil prices dropped below 59 usd a barrel in Asian trade after Hurricane Dennis, which wreaked havoc in the United States, missed Gulf of Mexico refining facilities, dealers said. At midday (0400 GMT), the benchmark New York contract, for light sweet crude in August, was at 58.87 usd a barrel, down 76 cents from its closing price of 59.63 usd in the US on Friday. The factor having the most impact on the market today was the Gulf of Mexico refineries escaping Hurricane Dennis, according to Victor Shum, a Singapore-based analyst with US energy consultancy Purvin and Gertz. "The storm had an effect more on the east coast, fortunately leaving the refining facilities undamaged," Shum said. Hurricane Dennis hit the US on Sunday, killing at least one person after claiming 16 lives in the Caribbean. US President George W. Bush declared Florida, Alabama and Mississippi to be in a state of "major disaster" due to the hurricane. A similar hurricane, Ivan, did hit Gulf of Mexico facilities last year, sending oil prices spiralling upwards at the time. Shum said he expected prices to continue falling into US trade later today but with the continued concerns over tight global supply, prices would stay near record highs in the short-term. Shum also said the market would remain volatile, after prices hit a record high of 62.10 usd on Thursday, then plunged 4.08 usd following the terrorist bombings in London before climbing back towards 60 usd again. "The market will continue to be volatile and react to short-term news ... I would expect the market to trade within the same range as last week," he said. "Overall, the market remains bullish because of supply tightness concerns, particularly for the last quarter of the year (when the northern hemisphere winter begins)."

© 1999-2024 Forex EuroClub
All rights reserved