Dean's second wind blows ill through market; OIL PRICES.
Crude oil prices rebounded yesterday after dropping below EUR70 overnight as Hurricane Dean threatened to regain strength and possibly further affect oil installations in Mexico.
While the storm was downgraded to a Category 1 storm on Tuesday, it was yesterday closing in on the Mexican mainland, battering evacuated oil platforms on the Bay of Campeche and threatening to regain some of the force it unleashed on the Yucatan Peninsula.
The sprawling, westward storm was projected to slam into the mainland near Laguna Verde, Mexico's only nuclear power plant, which is suspending production.
"We often see that when a storm weakens, people let down their guard completely. You shouldn't do that," said Jamie Rhome at the US National Hurricane Centre. "This storm probably won't become a Category 5 again, but it will still be powerful."
Light, sweet crude for October delivery rose 25 cents to EUR69.82 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract had fallen SI .39 to EUR69.57 a barrel on Tuesday.
The September contract fell EUR1.65 Tuesday to close and expire at EUR69.47 a barrel - the lowest close for a front-month contract since June 27.
Petrol and natural gas prices also extended their losses Tuesday as traders bet that demand was falling and supplies were safe.
But petrol yesterday rose 1.38 cents to EUR1 .8775 a gallon on the Nymex, while natural gas gained 2.7 cents to EUR5.844 per 1,000 cubic feet. Heating oil futures rose 0.64 cent to SI .9584 a gallon. October Brent crude rose 13 cents to EUR68.82 a barrel on the ICE Futures exchange in London.
With Dean's wind speeds down significantly, though, analysts said the storm is unlikely to cause any long-term disruptions.
There had been concern earlier that Dean - then a Category 5, the highest rating for a hurricane - could severely damage oil infrastructure in the main production area of Mexico's state oil company, Petroleos de Mexico, or Pemex.
Pemex evacuated more than 18,000 workers and shut down production in the area ahead of the hurricane. That will mean a production loss of 2.7 million barrels of oil and 2.6 billion cubic feet of natural gas a day, the company said. Of that, about 1.7 million barrels of oil a day is exported from three Gulf ports, where Pemex loaded final tankers on Monday.
Mexico was the third-largest oil supplier to the US in June, behind Canada and Saudi Arabia, providing 1.39 million bpd out of total US imports of 9.92 million bpd.
We often see that when a storm weakens, people let down their guard completely. You shouldn't do that
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|Publication:||The Birmingham Post (England)|
|Date:||Aug 23, 2007|
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