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Oil price above $83 on storm fears
Press Trust of India / Singapore September 28, 2007
Oil traded above $83 a barrel in Asia today as dealers watched a new storm developing in the Gulf of Mexico, which could impact oil production, dealers said.New York's main futures contract, light sweet crude, was 46 cents higher at $83.34 a barrel for November delivery in late morning trade.The contract had surged $2.58 to $82.88 in late US trades yesterday, when it edged closer to the all-time intra-day high of $84.10.Brent North Sea crude for November delivery was at $80.45, up 42 cents after breaching the $80-level for the first time in London, where the contract soared $2.60 yesterday.Tensions in the market were heightened on news that a storm developing in the Gulf of Mexico could affect oil production facilities, analysts said.According to the US National Hurricane Centre, a tropical depression was heading toward the coast of Mexico and could become a tropical storm.The Gulf of Mexico is a leading oil-producing region for the US and Mexico and investors are worried that, during the long Atlantic hurricane season that ends in November, a storm will damage oil rigs and other infrastructure."I think the storm sort of got people on edge," said Jason Feer, Asia Pacific vice-president and general manager of energy market analysts Argus Media, in Singapore.He said that while US crude stocks have been building, refinery run rates have dropped."That sort of indicates there's a potential bottleneck" heading into the North American winter when demand for heating oil picks up.

Story Comments
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Posted By : AbhishekSharma on 28 September,2007
Due to flurry of storms, one after another, Crude Oil prices have surged to a levels which seems beyond the normal fundamentals, although the affect to the refineries in Gulf of Mexico are yet to be determined. The bull run was always on the cards, September being the Hurricane Season in the US, now the season at its penultimate stage, prices are likely to correct in the days to come with overbought postions of traders in both domestic and international exchanges.

US Hurricane season: Devastation personified

With US hurricane season in picture analysts are wondering how to handle the winds blowing at more than 100 miles per hour. Dean devastated the coasts of Mexico recently, closing down the refineries of Crude in the major producing nation, Sigh of relief was there after it became the Category 2 storm from Category 5 storm. But this is not the last storm of the season, infact the opening one, plenty more to follow……….

Dean made its spectacular presence felt on Mexico's Yucatán Peninsula on 23rd August morning as a very powerful Category 5 hurricane. At that time the storm's strongest sustained winds were 165 miles (266 kilometers) an hour. Crude Oil escalated to almost $ 82 per barrel on NYMEX, on depleting inventories and rising blustery weather, on the qualms that the refineries in Gulf of Mexico will be hit hard.

Department of Atmospheric Science, University of Colorado has lowered there forecast slightly, yet they have persisted their call for a very active Atlantic Basin Hurricane Season in the year 2007.

For September University has predicted 5 named storms, 4 Hurricanes and 2 major hurricanes and Net tropical Cyclone Activity (NTC) of 80 which is well above the September average value of 48. October-November forecast calls for 5 named storms, 2 hurricanes, 1 major hurricane and NTC activity of 42, which greatly exceeds the October-November average value of 22.

SAFFIR-SIMPSON HURRICANE SCALE

Category 1 – Winds 119-153kph

Category 2 – Winds 154-177kph

Category 3 – Winds 178-209kph

Category 4 – Winds 210-249kph

Category 5 – Winds 249kph or higher

The next to come was Felix but no major threat was formed. Hurricane Humberto the latest in the making (Categor-1) forced major refineries in US to shut down their operations. The refinery affected (owned by Valero Corp) has the capacity to produce 325000 barrels per day Crude Oil. Humberto is the eighth named storm this year.This is just the start of the season, falling inventories, rising demand and winds blowing all round are all parked to lead Crude to whimsical upward ride. DEVASTATION PERSONIFIED……..