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Crude Oil Prices
Surpass $53 Per Barrel
Forbes
Oil prices surpassed $53 a barrel Friday on lingering concerns about
winter fuel supplies in the United States, operational snags in the Gulf
of Mexico and petroleum industry strife in Nigeria and Norway.
Light crude for November delivery rose 37 cents to $53.04 per barrel in
afternoon trading on the New York Mercantile Exchange. On Thursday,
Nymex oil futures settled at a new high of $52.67 per barrel.
"We still have bullish news," said Mario Chavez, vice president of
energy futures at ABN AMRO in New York, pointing to the cessation Friday
of oil-tanker offloadings at the Louisiana Offshore Oil Port due to bad
weather.
The Gulf of Mexico has been plagued by disruptions and delays to
petroleum output and shipping for weeks because of hurricane season. The
slow pace of recovery for oil-production and pipeline companies has
raised fears that the country's supply of heating oil and natural gas
will not grow as large as previously expected ahead of the winter fuels
season.
As a result, futures prices for heating oil and natural gas have charged
higher.
Heating oil for November delivery is about 75 percent more expensive
than a year ago, while natural gas for November delivery is roughly 40
percent more costly.
On Friday, November heating oil futures rose 2.11 cent to $1.45 per
gallon on Nymex. Natural gas futures fell 6.5 cents to $7.19 per 1,000
cubic feet.
While oil prices are about 70 percent higher than a year ago, they are
more than $27 below the peak inflation-adjusted price reached in 1981.
The overriding concern among oil analysts these days is the world's
scarce surplus production capacity, or supply buffer, which is
dangerously thin at around 1 percent above the global demand of 82
million barrels daily.
"The fact is the market can't afford to have too many supply cuts.
That's driving the prices high even though theoretically there is no
shortage," said Victor Shum, an oil analyst for Texas-based energy
consulting group Purvin & Gertz in Singapore.
There is ample nervousness about potential supply disruptions in Russia,
Iraq and beyond.
Among the worries for the market is the potential for further oil worker
strikes in Norway, where output could drop by as much as 200,000 barrels
per day, Dow Jones Newswires reported.
In Nigeria, a militia in the oil-producing south called Friday for
government forces to free captured fighters and leave the region. The
demands came ahead of talks aimed at calming tensions in Africa's
largest petroleum exporter, where rebels have threatened to attack the
oil industry and workers at Royal Dutch/Shell Group were scheduled to
end a two-day strike.
Also on Friday, Japan's economy and fiscal policy minister Heizo
Takenaka said the record run in oil prices could derail the country's
economic recovery, while Purnomo Yusgiantoro, president of the
Organization of Petroleum Exporting Countries, said the oil cartel had
no immediate plans to raise output any further.
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