LONDON, Oct 3: World oil prices dipped on Monday in range-bound trade, but traders remained uncertain about the consequences of hurricane-battered refineries in the US Gulf Coast.
New York’s main contract, light sweet crude for delivery in November, shed 44 cents to $65.80 per barrel in early trading.
In London, the price of Brent North Sea crude for November delivery lost 61 cents to $62.87 per barrel.
Oil futures had risen earlier on Monday as traders worried about US refineries producing enough heating oil for supplies during the fourth quarter, but prices lost ground during the afternoon.
“Prices are trading in a pretty narrow range,” said Investec analyst Bruce Evers. “The market is really looking for a catalyst, there’s no new news up there.”
“People are bored of hearing about oil and gas production being shut in the Gulf of Mexico and refinery problems, so we are struggling at the moment. We’re very range-bound.”
Analysts at Man Financial said there was no particular news driving prices higher this week, although the weekend suicide-bomb attack in Bali, Indonesia, may be contributing to the firmer tone at the start of Monday.
With Gulf of Mexico refineries still struggling to resume full operations after hurricanes Katrina and Rita, concerns remain over heating fuel.
Many US refineries have reopened after Rita but several others remain shut, closing in around 3.03 million barrels per day of refinery capacity.
Deutsche Bank analyst Adam Sieminski added: “A number of weather forecasters are now calling for a colder-than-normal winter in the US northeast — an area of the United States that historically uses a lot of heating oil and is increasingly focusing on natural gas.”
A US congressional committee on Friday heard that 12 refineries, accounting for nearly one-fifth of the country’s oil-processing capacity, remained shut down in the aftermath of the hurricanes.
Crude production in the Gulf of Mexico region is still almost fully off line following the hurricanes, according to the US Minerals Management Service, while 80 per cent of natural gas production remains shut down.
US President George W Bush appealed on Friday to Americans to conserve energy, notably by driving less, as the country’s refineries struggled to get over the impact of hurricane weather. —AFP
