No damage to production units was reported at three refineries where power supplies were knocked out by the storm in Port Arthur, Texas, idling 4.8 percent of U.S. capacity. At least two of them will be running normally next week, operators Total SA and Valero Energy Corp. said. The three are among the top 30 in the U.S.
``We could see some movement downwards'' because of the ``mix of the tropical depression and the start of the refinery maintenance season,'' said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. The prospect of further storms will keep prices in the mid-$70s, she said.
Crude oil for October delivery fell as much as 64 cents, or 0.8 percent, to $79.45 on the New York Mercantile Exchange. It was at $79.56 at 12:24 p.m. in London. Brent crude oil for November settlement was trading at $76.73 a barrel, down 39 cents, on London's ICE Futures exchange.
Yesterday, oil in New York touched $80.20, the highest intraday price since trading began in 1983, and for the first time closed above $80 a barrel at $80.09. Prices are up 26 percent from a year ago.
Humberto Weakens, Ingrid Forms
Humberto weakened to a depression over southwestern Louisiana. It was about 15 miles northwest of Vicksburg, Mississippi at 4 a.m. local time, with winds about half the strength of the 39-mile-per- hour threshold required for storm status.
``Since we've seen very low petrol inventories, near the level we saw after Hurricane Katrina two years ago, the supply buffer will be sensitive'' if any storms in the rest of the hurricane season inflict actual damage, Nordea's Saltvedt said.
The ninth storm of this year's season, Tropical Storm Ingrid, is 1,300 miles east of the Caribbean's Lesser Antilles islands and moving west-northwest with winds of about 40 miles per hour, the National Hurricane Center said. The system will probably weaken on a path toward Puerto Rico, the center said at 5 a.m. Miami time.
The Atlantic hurricane season, from June through November, can threaten oil facilities along the Gulf of Mexico coast.
Yesterday's record high was also caused by a U.S. Energy Department report that crude stockpiles saw the year's biggest decline last week. A decision by the Organization of Petroleum Exporting Countries to pump more oil failed to allay speculation of a shortage of crude next quarter, contributing to the gain.
``Prices could reach the mid $80s this year under these circumstances'' depending on OPEC's policy in coming months, said Heliodoro Quintero, an oil consultant and former governor of the organization. OPEC will review quotas again in December.
Rhetorical Increase
The output increase is just ``rhetoric,'' because OPEC may not have 500,000 barrels of spare capacity, especially as Persian Gulf suppliers are preparing for field maintenance, Matt Simmons, chairman of Houston-based Simmons & Co. International, said in an interview today.
OPEC agreed during its Sept. 11 meeting in Vienna to pump an extra 500,000 barrels a day, starting Nov. 1. The same day, the Energy Department said U.S. crude supplies shrank by 7.01 million barrels last week, more than double the decline expected by a Bloomberg News survey of analysts.
``There's going to be a very substantial draw of crude oil in the fourth quarter,'' said Simon Wardell, energy research manager at Global Insight Inc. in London. ``OPEC's going to produce this oil in November. It's not going to reach the eastern seaboard until December or January.''
Via|Bloomberg|by Grant Smith and Angela Macdonald-Smith
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