Oil up after IEA says demand resilient ($62.30/bbl)

Reuters ^ | October 11, 2005 | Janet McBride and Peg Mackey

[RWR8189]

LONDON (Reuters) - Oil climbed back above $62 on Tuesday after the International Energy Agency said it saw no lasting damage to demand that has pushed producers and refiners to the limit and could lead to fuel shortages this winter.

There have been signs recently that persistent high prices are taking their toll on the economies of the world's big consumers. Hurricanes that battered U.S. Gulf rigs and refiners catapulted oil to new record highs, finally crimping fuel use.

But the IEA, adviser to 26 industrialized nations, forecast demand growth would quicken to 1.75 million barrels per day next year "due to a rebound from the largely temporary impact of Hurricanes Katrina and Rita and a recovery in Chinese demand."

Winter fuel supplies should be ample provided refiners avoiding unplanned shutdowns, postponed maintenance and kept working flat out, the IEA said. Some analysts were pessimistic.

"The chance of all that being met the entire winter is zero," said Deborah White, senior energy analyst at SG Commodities in Paris.

U.S. crude oil futures were 87 cents higher at $62.67 a barrel by 0655 EDT, off Monday's 10-week low of $60.35. London Brent crude was up 72 cents at $59.50 a barrel.

Prices may have fallen a long way from late August's $70.85 record high, but they are still at levels unseen in real terms in a quarter of a century and are up 42 percent since January 1.

The world's oil producers have been pumping flat out to supply refiners that are running at full tilt to produce fuel, gasoline and heating oil for the United States, India and China.

Preliminary figures from China on Tuesday suggested oil imports were back on a growth track. September crude imports rose 4.8 percent year-on-year after falling in August.

In another sign that softer demand may be a temporary phenomenon, Western European car registrations hit a record for September.

FALLING U.S STOCKS

Gasoline stocks in the world's biggest consumer, the United States, are expected to show a week-on-week fall of 1.5 million barrels in data on Thursday, a Reuters survey found.

Distillate stocks, including heating oil, are expected to have dropped for the third-straight week of winter.

Traders are watching how quickly hurricane-battered U.S. crude and refinery production, as well as strike-hit French plants, will recover to increase fuel supplies.

About 2.1 million barrels per day (bpd) in U.S oil refining capacity remain offline due to hurricanes Katrina and Rita, the U.S. Energy Information Administration said in its latest assessment of the hurricanes' impact on the U.S energy sector.

"Increasing concerns over supply shortages in the U.S because of the outages at refineries in the Gulf Coast and disruptions to refinery operations in France are giving support to the market," said Tony Nunan at Mitsubishi Corp. in Tokyo.

Workers at the largest refinery in France, a major fuel supplier to the U.S and Europe, have extended a strike until Wednesday. But a port blockade at the 600,000-bpd Fos-Lavera southern refining center is expected to ease after workers agreed to resume operations on Monday.

(additional reporting by Luke Pachymuthu)

[RWR8189]

Light, Sweet Crude Oil

10/11/2005 Session Contract Detail for Dec 5

	Last				62.30
	Open High				61.60
	Open Low				61.60
	High				62.48
	Low				61.60
	Settle				61.57
	Change				+.73
	Open Interest				199134
	Volume				0.00
	Last Updated				10/11/2005 07:30:55

Unleaded Gasoline

10/11/2005 Session Contract Detail for Nov 5

	Last				1.8215
	Open High				1.8020
	Open Low				1.8020
	High				1.8220
	Low				1.8020
	Settle				1.8006
	Change				+.0209
	Open Interest				58432
	Volume				0.00
	Last Updated				10/11/2005 07:32:56

Heating Oil

10/11/2005 Session Contract Detail for Nov 5

	Last				1.9800
	Open High				1.9650
	Open Low				1.9650
	High				1.9860
	Low				1.9635
	Settle				1.9718
	Change				+.0082
	Open Interest				57676
	Volume				0.00
	Last Updated				10/11/2005 07:32:23

[Perdogg]

Dated Brent Spot $58.53 +0.80 +1.38% 07:51

[thackney]

OCT. 11 1:08 P.M. ET Crude oil prices rose more than $1 a barrel Tuesday after the International Energy Agency forecast that last month's drop in energy demand would moderate and some weather watchers predicted a colder-than-normal winter in the northeastern United States.

Energy futures also moved higher on persistent concerns about the pace at which oil and natural gas production -- and oil refining -- have recovered along the Gulf Coast in the aftermath of hurricanes Katrina and Rita.

Light sweet crude for November delivery climbed $1.05 to $62.85 a barrel on the New York Mercantile Exchange, where unleaded gasoline futures rose less than a penny to $1.81 per gallon.

http://www.businessweek.com/ap/financialnews/D8D5V3700.htm?campaign_id=apn_home_down&chan=db

[thackney]

SAN FRANCISCO (MarketWatch) -- Crude-oil futures climbed Wednesday to close above $64 a barrel, the highest in more than a week, as the latest industry reports predict a rebound in energy demand next year.

Petroleum-supply data from the Energy Department will be released Thursday, a day later than usual due to the Columbus Day holiday.

On Wednesday, the Energy Information Administration issued its monthly short-term energy outlook report and in it, "there is something for bears and bulls alike," said James Williams, an economist at WTRG Economics. "This underscores the tenuous situation in the marketplace."

Crude for November delivery traded as high as $64.70 a barrel on the New York Mercantile Exchange. The contract closed at $64.12 a barrel, up 59 cents and its highest since Oct. 3.

http://www.marketwatch.com/news/story.asp?guid=%7B8A70E0B6-78EB-42C5-8730-3414AB062C59%7D&siteid=google&dist=