NEW YORK, 26 October 2005 — Oil prices rose to $62 a barrel yesterday as cool weather in parts of the United States boosted heating oil and natural gas and countered worries over waning demand.
US light crude traded $1.68 higher at $62.00 a barrel by 1720 GMT, following a loss of 31 cents on Monday. London Brent crude rose $1.35 to $59.59.
The rise came as chilly weather in Texas and along the eastern seaboard triggered a 6 percent spike in US natural gas prices and a 4 percent jump in heating oil. “We’ve gone away from worrying about supply and are concerned that demand may be stronger than anticipated if we get an early winter and stay cold through March,” said Phil Flynn, analyst at Alaron Trading.
An early-season Nor’easter — a storm that brings chilly Northeast winds to the coast — was pelting the eastern seaboard yesterday. Meanwhile, temperatures in Texas were sharply below normal.
Underpinning gains, the oil industry’s recovery from a parade of hurricanes in recent months has been slow, particularly among offshore crude and natural gas producers.
As of Monday, 67.79 percent of the Gulf of Mexico’s 1.5 million bpd of crude production capacity was shut along with 54.72 percent of the region’s 10 bcfd of natural gas production, according to the Minerals Management Service.
That reflects a mild deterioration from last week, after Hurricane Wilma threatened the region and triggered precautionary evacuations. Since Aug. 26, hurricanes shut 67.517 million barrels of crude output — more than three days of total US consumption — and 342.511 billion cubic feet of natural gas output.
Meanwhile, the dollar fell sharply across the board yesterday after US data showed an unexpected decline in consumer confidence, while the euro strengthened on the back of solid German confidence and inflation figures. The euro rose to 1.2101 dollars in late European trading from 1.1987 dollars late on Monday in New York. The dollar stood at 114.78 yen from 115.43 yen on Friday.
The US Conference Board’s consumer confidence measure fell to 85.0 in October from 87.5 in September. Analysts had been expecting a small rebound after the sharp drop seen in the wake of the Katrina hurricane disaster.
In late European trade, the euro was changing hands for 1.2101 dollars from 1.1987 late Monday in New York, 138.86 yen (138.36), 0.6777 pounds (0.6778) and 1.5445 Swiss francs (1.5422). The dollar stood at 114.78 yen (115.43) and 1.2763 Swiss francs (1.2867).
On the London Bullion Market, the price of an ounce of gold stood at $477.25 from $466.10 late on Monday.
Meanwhile, London’s FTSE 100 index closed down O.49 percent to close at 5,182.1. In New York, US stocks drifted lower yesterday. Asian stocks closed off their highs yesterday.