Oil prices lower as threat from hurricane eases

SINGAPORE - Oil prices eased in Asian trade Wednesday as it looked like Hurricane Dolly would spare vital energy production facilities in the Gulf of Mexico, dealers said.

By (AFP)

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Published: Wed 23 Jul 2008, 12:24 PM

Last updated: Sun 5 Apr 2015, 12:56 PM

They said renewed worries about slower US economic growth, which could hit energy demand, were also weighing on prices.

In afternoon trade, New York's main contract, light sweet crude for September delivery, fell 73 cents to 127.69 dollars a barrel from its Tuesday close of 128.42 on the New York Mercantile Exchange.

The August contract expired Tuesday at 127.95.

Brent North Sea crude for September delivery was off 54 cents at 129.01.

‘Oil markets believe that Dolly is now unlikely to significantly affect oil production in the Gulf of Mexico,’ said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

Some oil drilling companies evacuated personnel from their offshore rigs as they waited to see where Dolly would make landfall.

Around one quarter of US domestic crude production and 15 percent of natural gas output comes from the Gulf of Mexico.

The Atlantic hurricane season, which began in June and lasts until the end of November, usually peaks from September onwards and has been largely uneventful until now.

Tropical storms in 2005 caused major disruption to vital energy production in the Gulf of Mexico and pushed up oil prices to then record levels.

Traders were also awaiting the release of the weekly US report on energy reserves later Wednesday.

Analysts polled by energy information provider Platts are expecting US crude reserves to decline by 1.9 million barrels, while gasoline stocks are likely to rise by 500,000 barrels.

The Energy Information Administration last week said crude inventories rose by 3.0 million barrels to 296.9 million barrels in the week ending July 11, confounding market expectations for a decline of 2.2 million barrels.

The weekly report on US energy reserves provides investors with clues on oil demand in the United States, the world's biggest energy user.

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