Crude futures hold above $61 a barrel amid winter supply concerns
Oil prices held above $61 a barrel Friday amid lingering concerns that U.S. Gulf of Mexico oil facilities recovering from hurricane damage will struggle to meet heating-oil demand as the Northern Hemisphere winter approaches.Light, sweet crude for December delivery rose 11 cents to $61.20 a barrel on the New York Mercantile Exchange. December Brent rose 3 cents to $59.17 a barrel in London.Concern is growing among traders that damage caused by hurricanes Katrina and Rita will hurt already aging U.S. refineries’ efforts to gear up for the winter, the peak season for production of distillate stocks – fuels that include heating oil, jet fuel, kerosene and diesel oil.The U.S. government said Thursday that 68 percent of daily oil production and 56 percent of daily gas production in the Gulf of Mexico remained shut down in the wake of the hurricanes.U.S. supplies of distillate fuel shrank by 1.6 million barrels to 121.1 million barrels, their seventh decline in two months, the U.S. Energy Department said in its midweek report.Nymex heating oil futures fell 1.14 cent to $1.8425 a gallon, while gasoline futures climbed 2.74 cents to $1.62 per gallon.China, the world’s second largest oil-consumer after the United States, reported Friday that it imported 4.8 percent more crude oil in September compared with a year ago.The nation imported 76 million barrels during the month, or an average of 2.65 million barrels a day, data issued Friday by the General Administration of Customs showed.”The pace of demand growth in China is something we are all watching, because it will have a greater effect on crude oil demand-supply balance at some stage,” said chief commodities strategist Tetsu Emori of Mitsui Bussan Futures in Tokyo.Oil prices are 14 percent below the late August peak of $70.85 a barrel, when Katrina made landfall.But natural gas futures have nearly doubled compared to a year ago and are expected to produce huge heating bills this winter across much of the United States.U.S. lawmakers on Thursday urged the Bush administration to open an area of the eastern Gulf of Mexico to natural gas development, arguing that just an announcement of this new supply of gas might help stabilize or reduce natural gas prices.But the U.S. Interior Department has told Florida it would not consider a lease sale in the area until at least 2007. Florida opposes development of the area because some of it is within 100 miles of the state’s Panhandle region.Natural gas for December delivery fell 65.4 cents to $13.03 per 1,000 cubic feet.