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The NewsFuror

Friday, September 21, 2007

Storm fears hold oil prices high


Oil prices held close to $82 a barrel in Asian trade, as dealers kept a close watch on the development of a potential tropical storm in the Gulf of Mexico.

The potential storm comes ahead of the US peak winter demand and after American inventories fell by more than expected last week.

Prices had reached a record $84.10 in trade on Thursday before falling back.

Early on Friday US crude for November delivery was at $81.65 a barrel, amid fears of a weekend storm.

Meanwhile, London Brent crude for November stood at $78.87.


Shutdowns

Energy firms have shut over 360,100 barrels per day (bpd) of output in the Gulf of Mexico output - over a quarter of the region's crude production.

They have also shut down 16.7% of natural gas production as a tropical depression blew into the area.

It comes after US crude stocks in the fell for the fourth week running by a higher-than-expected 3.8 million barrels last week, leaving them 4% down from this time in 2006.

"I expect a lot of support for pricing as traders don't want to be caught short ahead of the weekend," said Victor Shum of Purvin and Gertz in Singapore.

"And folks will continue to watch how this storm develops over the course of trading."

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