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Oil holds at $64 on likely US fuel stocks fall
10/14/2005
SINGAPORE, Oct 13 (Reuters): Oil held steady around $64 today, after strong gains this week on forecasts of rebounding demand growth and lower US fuel inventories ahead of winter.
US crude oil futures edged down 5 cents to $64.07 a barrel, but stood 3.5 per cent higher this week. London Brent crude shed 2 cents to $60.55 a barrel.
Analysts said forecasts of healthy US demand heading into winter, after worries that high prices were taking a toll on major consumers, were supporting a market only slowly recovering from disruptions to supplies from hurricanes and strikes.
US distillate stocks, including heating oil, were forecast to have dropped 1.7 million barrels last week in the world's top oil consumer, which would be a third-straight week of falls.
Analysts said fears of a winter supply crunch were justified, after the US government said it could be many months before the energy industry makes a complete recovery from hurricanes Katrina and Rita.
Stronger US heating oil retail prices meant a price trigger has been met that would allow the US government an option to tap into the 2 million-barrel heating oil reserves in the US northeast, its energy department said Wednesday.
About 70 per cent of the 1.5 million bpd of US crude production capacity in the Gulf of Mexico also remains offline, along with 59 per cent of the region's natural gas production.
High energy prices and hurricane-linked supply disruptions will slow US and world oil consumption this quarter, but demand will recover next year, the US government said Wednesday, in a forecast that reflected that made by the International Energy Agency (IEA) this week.
Worries over weaker demand and a global release of emergency stockpiles had dragged oil down from a record-high of $70.85 on Aug. 30, though prices remain 47 per cent up this year amid stretched global fuel supplies.
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