NEW YORK, 10 September 2005 — Oil prices fell yesterday as gasoline futures plummeted on signs of slowing demand growth and expectations that refiners would delay autumn maintenance to make up for supplies shut by Hurricane Katrina.
Slowing global oil demand growth may yet help offset the storm’s devastating blow to America’s energy hub and help the International Energy Agency (IEA) to fend off a petrol shortage, the West’s energy watchdog said yesterday. US light crude was down 39 cents at $64.10 a barrel by 1542 GMT. Prices are down from a record $70.85 last week. London Brent crude fell 14 cents to $62.94.
Valero Energy Corp., the largest US refiner, said it will delay any maintenance plans that it can at its plants to keep fuel production high in the wake of Katrina. The US Department of Energy said a day earlier that refiners have volunteered to delay work on their plants that usually occur in the fall as gasoline demand wanes.
Limiting losses on crude was the slow pace of the US oil industry’s recovery after the storm heightened fears that tight supplies might last months.
Shell said yesterday only 60 percent of its normal 450,000 barrels per day of crude output in the Gulf is expected to be back by the end of the year. Katrina damaged the topside of Shell’s Mars platform, which produces about a third of its Gulf crude, and was one of the areas expected to be down through 2005.
About 5 percent of US oil refining capacity may remain offline for several months after the storm shut down 10 percent of refining capacity, the US Department of Energy said.
“The loss in potential gasoline output from these plants alone is expected to be of the order of 600,000 barrels a day,” said Barclays Capital in a report.
New data from the US Minerals Management Service dashed hopes of a swift recovery in production, revealing about 900,000 bpd, or 60 percent, of US crude output from the Gulf of Mexico was still shut.