Oil prices rise as another storm brews in Caribbean
Crude-oil futures rose more than $1 a barrel Monday on concerns that a tropical storm in the Caribbean could grow into a hurricane and threaten Gulf of Mexico oil facilities still recovering from previous hurricanes.Analysts said prices also received support from weekend unrest in Iran – OPEC’s second-largest producer of crude – and mixed signals on spare capacity from members of the Organization of Petroleum Exporting Countries.Estimates from OPEC of sagging demand growth worldwide contained in its monthly oil market snapshot seemed to have little immediate effect.In the report Monday, OPEC said demand growth for this year would amount to 1.18 million barrels a day, or 17 percent less than previously thought, with total demand at 83.26 million barrels a day.Much of the overall reduction came from cuts in the peak demand seen in the final three months of the year, with OPEC estimating growth for that period at 740,000 barrels a day, compared to previous expectations of 1.23 million barrels a day.Light, sweet crude for November delivery rose $1.73 to settle at $64.36 a barrel on the New York Mercantile Exchange.December Brent futures on the International Petroleum Exchange in London rose 93 cents to $60.41 a barrel.Products also jumped. Heating oil gained 3.33 cents to settle at $1.9833 a gallon on the Nymex, while gasoline rose by 6.67 cents to $1.8153 per gallon. Natural gas rose 66.8 cents to settle at $13.887 per 1,000 cubic feet.Tropical Storm Wilma formed south of the Cayman Islands on Monday as the 21st named storm of the season, tying the 1933 record for the most storms in an Atlantic season, the National Hurricane Center in Miami said.At 11 a.m. EDT, Wilma had top sustained wind near 45 mph, up 5 mph from earlier in the day, the National Hurricane Center said. It was centered about 220 miles south-southeast of Grand Cayman. Long-term forecasts show the storm heading into the Gulf of Mexico by the weekend. Experts said high water temperatures and other conditions meant it could become a significant hurricane.Most U.S. oil production and refineries are in the central and western Gulf, and traders are nervous about yet more damage to oil facilities after hurricanes Katrina and Rita.After surging above $70 a barrel in late August, oil prices have pulled back in recent weeks, although there are plenty of concerns about the pace of recovery following Rita, and whether supplies will be adequate going into the Northern Hemisphere winter, when demand for heating oil peaks.”The market is on edge; it’s looking for directions. There’s a lot of volatility now, which is characteristic of a tight supply situation,” said Victor Shum, energy analyst at Texas-headquartered Purvin & Gertz in Singapore.In Vienna, PVM Oil Associates suggested that fears of instability in Iran – where a weekend bomb attack killed five people and injured 80 – also acted to shore up the market. And “mixed signals from OPEC,” with Algeria “assuring that the organization has enough spare capacity next year to bring down prices” even as Venezuelan President Hugo Chavez asserts the opposite, added to market volatility.On Monday, the federal Minerals Management Service reported a slight uptick in Gulf of Mexico oil and natural gas production. Almost 1 million barrels a day, or 66 percent, of daily oil output remains down. Close to 5.5 billion cubic feet, or 55 percent, of daily daily natural-gas output remains down.—Associated Press Writer Gillian Wong in Singapore contributed to this report.