LONDON, Aug 25: Oil prices dipped on Thursday, one day after striking an all-time high of $68.00 per barrel in New York on hurricane fears in the oil-rich US Gulf of Mexico, dealers said.
New York’s main contract, light sweet crude for delivery in October, fell back 52 cents to $66.80 per barrel in early trade.
It struck $68.00 in after-hours trading late Wednesday — the highest point since it was first traded in 1983.
In London, the price of Brent North Sea crude oil for delivery in October sank 39 cents to $65.62 per barrel on Thursday.
“Brent and US crude futures surged higher on Wednesday on concern that a new storm could affect the Gulf of Mexico oil output and because of a higher-than-expected fall in US gasoline inventories,” noted analyst Sam Tilley at the Sucden brokerage.
Simon Wardell, analyst at research group Global Insight, added that there were “some concerns over the stock report on Wednesday with gasoline stocks going down, but I’m not sure that’s the prime mover.”
Tropical storm Katrina is forecast to cross southern Florida on Friday and then strengthen to hurricane status in the US oil producing region of the Gulf of Mexico by Monday, analysts said.
Meanwhile, lower-than-expected gasoline (petrol) inventory levels in the United States also compounded supply worries.
The US Department of Energy said on Wednesday that crude oil supplies increased 1.8 million barrels in the week to August 19 — well above market predictions of a 200,000-barrel rise.
But gasoline reserves dropped sharply by 3.2 million barrels, after a fall of five million barrels the previous week. The figure beat analysts’ forecasts of a 900,00-barrel decrease.
Gasoline demand is expected to level out as the high-demand US summer driving season draws to a close, traditionally ending on the Labour Day holiday on September 5.
Refiners will then focus on stockpiling distillates, particularly heating fuel, before the cold sets in during the northern hemisphere winter in the fourth quarter.
Wardell added: “The driving season is coming to an end, although gasoline is still going to be a problem as consumption is still going to be fairly high over the next few months.”
This month, crude prices have continued to break fresh records owing to US refinery outages and mounting supply worries, while market sentiment has remained bullish due to the strong global appetite for oil.—AFP