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Oil falls below $100 on low Ike damage

Oil falls below $100 on low Ike damage
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First Published: Mon, Sep 15 2008. 10 29 AM IST
Updated: Mon, Sep 15 2008. 10 29 AM IST
Singapore: Oil prices fell below $100 a barrel on Monday after Hurricane Ike inflicted minimal damage to oil installations on the Texas coast.
Light, sweet crude for October delivery declined $1.68 to $99.50 a barrel in electronic trading on the New York Mercantile Exchange midday in Singapore. The contract rose 31 cents on Friday to settle at $101.18 after dropping as low as $99.99 per barrel. Before Friday, the last time Nymex crude traded below the $100 mark was 2 April.
“Now that Ike has come and gone, initial reports indicate no real damage to the oil infrastructure in the Gulf coast area,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
Federal officials said on Sunday that the storm destroyed at least 10 oil and gas platforms and damaged pipelines in the Gulf of Mexico only a small amount of the 3,800 production platforms in the Gulf. Three years ago, back-to-back hurricanes knocked out more than 100 platforms.
Power outages were slowing efforts to restart the refineries. Valero Energy Corp. said only one of its closed refineries had power, and spokesman Bill Day said he couldn’t estimated how long it would take to resume production.
Investors are now turning their attention toward falling oil demand in the US, Europe and Japan as slowing economic growth threatens to undermine consumer spending.
Oil fell despite reports that militants have launched another attack Nigeria’s oil infrastructure in a third day of violence.
Lt. Col. Sagir Musa of the Nigerian military task force in the southern oil delta region say militants in speedboats attacked troops at a Royal Dutch Shell PLC oil-pumping station early Monday. The fighters arrived in about 10 speed boats and detonated dynamite and other explosives during the battle.
Musa said it was possible that the so-called flow station was damaged during the attack. Shell officials couldn’t immediately be reached for comment.
Prices were kept from falling further by a weakening dollar. The euro jumped to $1.4459 on Monday from $1.4229 late Friday, while the dollar dropped to 105.31 yen from 107.92 on Friday. Usually when the dollar falls, investors buy oil as a hedge against inflation.
In other Nymex trading, heating oil futures fell 3.62 cents to $2.9029 a gallon, while gasoline prices dropped 9.45 cents to $2.6751 a gallon. Natural gas for October delivery rose 0.4 cents to $7.37 per 1,000 cubic feet.
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First Published: Mon, Sep 15 2008. 10 29 AM IST
More Topics: Oil | Prices | Storm Ike | Gulf of Mexico | US |