Oil prices hovered in the $60 range today, climbing to $61.10 briefly and then going back down to $60.30. Traders remain moody, eyeing the storm Emily moving into the Caribbean, as they wonder what the effects will be on the Gulf of Mexico.
Brent crude in London was down about 50 cents going for 58.35. Gasoline was down 2 cents at 1.76 and heating oil traded down about 3 cents from today’s high of $1.74 to $1.71.
EIA gave their weekly reports and once again, the rise in distillate inventories surprised traders. The report said stocks fell 3.9 million barrels to 321 but that total is still well above the normal average for this time of year. Most watchers were expecting a 3 million barrel or so drop.
Gasoline dropped 2.7 million barrels to 212.6 million total. The real surprise came from the 3.2 million barrel climb in distillates, which include heating oil, diesel and jet fuel. This takes the total up to 120.4 million barrels of oil.
Most critics suggest this situation is more based on Cindy than Dennis. They suggest Dennis disruption won’t be felt until next week. So traders get upset about the fact the hurricane or tropical storm might hit the platforms and then when they actually see what’s been done, the prices go up again.
Oil workers have restarted production and damage was minimal. The one exception might be BP’s Thunder Horse Platform which lists heavily as crews race to right the massive rig.
Right now, the National Hurricane Center (NHC) expects Emily to move into the Gulf and she’ll likely be hurricane strength when she does. Traders did relax some when the NHC said they expect the storm to move to the Yucatan peninsula and miss the Gulf oil field entirely.
Even with storms not as bad as anticipated, that still leaves the market extraordinarily volatile as more storms will eventually creep up and terrorist bombings in London occur. Much of the world’s oil supply comes from unstable political regions and that also weighs on the minds of traders.
John Stith is a staff writer for Murdok covering technology and business.
