10/02 16:11

Crude Oil Soars on Concern About Low U.S. Heating Oil Supplies

By Mark Shenk

New York, Oct. 2 (Bloomberg) -- Crude oil soared more than 4 percent on expectations that heating oil storage levels at U.S. refineries, now down by more than a third from a year ago, will still be low when cold weather spurs demand in the weeks ahead.

Supplies are low partly because refiners concentrated on making gasoline during the peak summer driving season. It will take time for extra oil from OPEC, which was set to start flowing yesterday, and 30 million barrels of U.S. emergency reserves, to reach refineries for processing, analysts said.

``Until heating oil and gasoline supplies are seen rising, prices will be high,'' said Michael Fitzpatrick, a trader at Fimat USA Inc. in New York. ``We need to see them in storage tanks -- that is tops on everyone's radar screen right now.''

Crude oil for November delivery rose $1.34, or 4.4 percent, to $32.18 a barrel on the New York Mercantile Exchange, the biggest gain since Sept. 15. Prices still are down 15 percent from a 10-year high of $37.80 on Sept. 20, two days before U.S. President Bill Clinton announced the release of oil from national reserves.

In London, Brent crude oil for November settlement rose $1.24, or 4.2 percent, to $31.08 a barrel on the International Petroleum Exchange.

Richardson and the Refiners

U.S. Energy Secretary Bill Richardson was to meet with U.S. oil refiners, petroleum marketers and transportation experts today to discuss ways to get more refined products to consumers.

``We're getting positive information about heating oil stocks,'' he told reporters in Washington.

Many refiners take advantage of periods of slow demand in the spring and fall to retool and perform routine maintenance. Energy Department officials have said that if refiners boost production this month, as they did in 1996, they could make more heating oil than usual before the weather gets cold.

Heating oil for November delivery rose 3.49 cents, or 3.8 percent, to 96.05 cents a gallon on the Nymex. Gasoline for November delivery rose 3.66 cents, or 4.3 percent, to 88.31 cents a gallon.

Traders were also watching the movement of Hurricane Keith, now stalled near the coast of Belize and the eastern edge of Mexico's Yucatan Peninsula. The storm was forecast to move north or northwest over the next two to three days, the Miami-based National Hurricane Center said, and was expected to weaken as it moves over land.

-- Carl Jenkins (Somewherepress@aol.com), October 02, 2000

Answers

Here's the rest and a link:

Hurricane Outlook

Moving north would bring the hurricane into the Gulf of Mexico, where it would threaten offshore oil production rigs and onshore refineries and pipeline pumping stations, which could slow the processing and distribution of heating oil.

``People are nervous about'' the hurricane, said Tom Bentz, senior analyst and broker at BNP Paribas Commodity Futures Inc. in New York. ``The storm is expected to move north, which is making crude bounce back up.'' Escalating tensions between Kuwait and Iraq, renewing concern of possible disruptions to supply from the Middle East where 30 percent of the world's oil is pumped, helped send prices higher.

Iraq stole large amounts of Kuwaiti oil during the 1990-91 Gulf War, Kuwait's deputy premier said, the official KUNA news agency reported, responding to Iraqi allegations last month that Kuwait was taking oil from a border area.

Oil also gained after European governments last Friday backed away from following the U.S. in tapping their strategic oil reserves.

EU ministers called for talks with oil-producing nations and said that dipping into their reserves remains an option. As for the Organization of Petroleum Exporting Countries' suggestion that the Europeans cut taxes to reduce costs to consumers, such action would ``send the wrong signal,'' said Eichel, who wants to increase energy efficiency. Truckers

The EU ministers ruled out an across-the-board cut in fuel taxes. Truckers, farmers and other consumers have protested across Europe in recent weeks because of soaring fuel costs. In Argentina, truck owners blocked roads in a nationwide strike to protest heavy fuel and other costs, rejecting last-minute cuts in diesel prices and highway tolls as too little.

The strike, which truck owners vow to maintain indefinitely, had immediate effects in the South American nation of 36 million. In Buenos Aires, only a few trucks showed up at the main cattle market Hacienda de Liniers on Monday, compared with a normal fleet of 300.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial% 20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=b lk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOdjsDBVuQ3J1ZGUg

-- Carl Jenkins (Somewherepress@aol.com), October 02, 2000.

It always astounds me that the world price of crude oil always rises based on the shortage of heating oil in the U.S., used primarily in the Northeast....if sombody can explain that to me, I'm all ears.

-- R2D2 (r2d2@earthend.net), October 02, 2000.