- NEW YORK (Reuters) - Oil
prices hit a new record of more than $51 a barrel Tuesday as a prolonged
U.S. production outage following Hurricane Ivan attracted fresh speculative
buying.
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- U.S. light crude set a high of $51.24 a barrel in afternoon
trading, while London Brent moved to a record $47.40 a barrel.
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- "Fair value is probably not too far from these levels,"
said Emanuele Ravano, head of portfolio management at PIMCO. "If you
look at the longer term factors there is still clearly demand inelasticity
and poor infrastructure."
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- High prices have had little effect on the fastest oil
demand growth in a generation this year, while concern of potential supply
disruptions as oil producers pump at full capacity has fed price gains.
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- Supply anxiety is building ahead of the northern hemisphere
winter, when demand for heating oil surges. Inventories of crude and distillates
in the world's top energy user, the United States, are running as much
as 4 percent below last year.
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- "U.S. production has been slow to recover from Hurricane
Ivan and people are worried by the low level crude and distillate inventories
ahead of winter," said Tetsu Emori, chief commodities strategist at
Mitsui Bussan Futures in Tokyo.
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- In the U.S. Gulf of Mexico, nearly 29 percent or about
480,000 barrels per day of oil output remains shut three weeks after Hurricane
Ivan first hit the region, the U.S. Minerals Management Service said Monday.
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- U.S. consultancy PIRA Energy estimates at least 40 million
barrels equivalent of oil and gas will be deferred by Hurricane Ivan.
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- PIRA said it calculates 17 million barrels of oil, 4
million barrels of natural gas liquids and 110 billion cubic feet of natural
gas will be shut in by the hurricane.
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- The estimate includes an assumption about Ivan losses
in the rest of October and into November.
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- U.S. DATA
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- Dealers will now look to U.S. oil inventory data, due
out Wednesday, to gauge how comfortable oil supplies are in the weeks approaching
winter.
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- A revised Reuters poll of 10 analysts predicted on average
a fall in distillate stocks -- including heating oil, the main winter fuel
in the northeast of the country -- by 900,000 barrels and a drop in gasoline
stocks by 600,000 barrels.
-
- The weekly report by the Energy Information Administration
was expected to show crude stocks rising in the week to Oct. 1 by 2.2 million
barrels from the week earlier.
-
- Oil prices had eased Monday after Nigerian rebels withdrew
a threat to target the country's over 2.3 million bpd of oil production
facilities, but concerns lingered over the OPEC member's stability in the
near term.
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- Iraq also remains volatile, with saboteurs still targeting
pipelines. Monday, an internal line linking the country's north and south
fields was hit, although this did not affect exports.
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- Together the two countries produce over 4.5 million bpd,
about three times the amount of spare production capacity held by members
of the Organization of the Petroleum Exporting Countries (OPEC), most of
that in Saudi Arabia.
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- Market bulls are encouraged by signs that speculative
funds, a major factor in this year's steep oil price rally, continue to
buy into the market.
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- Speculators on crude oil on the New York Mercantile Exchange
increased net long positions in the week ended Sept. 28 in a bet that prices
would rise, the U.S. Commodity Futures Trading Commission said.
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- _____
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