Oil holds at $82 on shutdowns

Source: Energy Digital

Date :21/09/2007 09:01:33

A potential storm in the Gulf of Mexico has resulted in shutdowns that have kept oil prices at close to $82 a barrel in Asian trade.

The storm threat comes ahead of the US peak winter demand and after American inventories fell by more than expected last week.

Prices had reached a record $84.10 in trade yesterday before falling back.

Early on Friday US crude for November delivery was at $81.65 a barrel, amid fears of a weekend storm.

Meanwhile, London Brent crude for November stood at $78.87.

Oil has traded above $80 for the past week, despite OPEC's decision last week to raise output from November, on thinning US inventories, a weakening dollar, a US interest rate cut that eased fears of a recession and the storm threat.

Fuel demand

Energy firms have decided to shut over 360,100 barrels per day (bpd) of output in the Gulf of Mexico output - over a quarter of the region's crude production.

They have also shut down 16.7 percent of natural gas production as a tropical depression blew into the area.

It comes after US crude stocks in the fell for the fourth week running by a higher-than-expected 3.8 million barrels last week, leaving them 4 percent down from this time in 2006.

Oil prices slipped but held near $82 a barrel on Friday, after hitting a record above $84 the previous day as a tropical depression forced the shutdown of Gulf of Mexico output ahead of peak winter fuel demand.

Iran's OPEC governor said the jump in oil prices, which have climbed a third this year and quadrupled since 2002, was not sustainable

September 21 2007

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