rookie1
09-23-2004, 05:00 AM
Don't know how we could consider dipping into the spr with a war going on.
By Toby Reynolds
LONDON (Reuters) - High-flying oil prices paused in their ascent on Thursday as the U.S. government considered whether to loan out crude from its strategic petroleum reserve after Hurricane Ivan sliced into supplies.
U.S. light crude dipped 33 cents to $48.02 a barrel after rising more than $1 on Wednesday following an eighth straight weekly fall in U.S. inventories.
U.S. prices are within $1.50 of the Aug. 20 all-time high of $49.40. London's Brent crude, which matched its $45.15 record high on Thursday, slipped 21 cents to $44.72 a barrel.
Prices fell after a U.S. government source said on Wednesday two U.S. refiners had requested loans of crude oil from the emergency reserve after Hurricane Ivan disrupted U.S. offshore production and slowed oil imports.
"The market is concerned that there will be a release of SPR oil. Washington could announce it on Thursday. The stocks are for emergency use and that's what we have now," said a broker based in New York.
The government source said officials were reviewing the requests, one for 100,000 to 200,000 barrels and the other for 1 million to 2 million barrels.
The last time Washington loaned oil from the SPR was in late 2002 when Hurricane Lili disrupted shipments into Gulf Coast distribution hubs.
The White House has said it would not withdraw oil from the 670 million barrels reserve, held in underground salt caverns at four sites in Louisiana and Texas, except for a severe supply disruption.
Last month, Vice President Dick Cheney defined such a disruption as the loss of 6-5 million barrels per day (bpd) in U.S. imports. The United States imports about 11 million bpd of crude and petroleum products.
SPR LOAN REQUESTS
U.S. government data showed a drop of 9.1 million barrels in crude inventories in the week to Sept. 17 after Hurricane Ivan thrashed through the Gulf of Mexico, slowing imports and disrupting offshore production.
The fall, the eighth in as many weeks, put national commercial stocks at 269.5 million barrels, the lowest level since February and almost 14 million barrels below a year ago.
The Energy Information Administration (EIA) also reported declines in oil products' tanks, with distillates falling 1.5 million barrels and key heating oil down by 1 million barrels.
Heating oil stocks normally build at this time of year ahead of the northern hemisphere winter. New York heating oil futures have hit record highs.
"The falls in oil product inventories are more significant than the fall in crude inventories. Crude imports will rebound, while restoring balance in oil products will take far longer," said Barclays Capital in a review of the weekly EIA data.
There are also concerns of further supply disruptions from YUKOS , Russia's biggest oil exporter, which is battling bankruptcy from multi-billion-dollar tax debts.
YUKOS's main subsidiary, Yuganskneftegaz, was forced to cut crude output by 35,000 bpd, or 2 percent of YUKOS production, after a power firm cut supplies for non-payment.
Earlier this week, YUKOS said it would trim crude exports via rail to China as it struggled to pay monthly transport costs after its bank accounts were frozen.
Global supplies are straining to meet the fastest growth in oil demand in 24 years. World crude production is close to its limits with only top exporter, Saudi Arabia, holding any significant spare capacity of about 1 million bpd.
By Toby Reynolds
LONDON (Reuters) - High-flying oil prices paused in their ascent on Thursday as the U.S. government considered whether to loan out crude from its strategic petroleum reserve after Hurricane Ivan sliced into supplies.
U.S. light crude dipped 33 cents to $48.02 a barrel after rising more than $1 on Wednesday following an eighth straight weekly fall in U.S. inventories.
U.S. prices are within $1.50 of the Aug. 20 all-time high of $49.40. London's Brent crude, which matched its $45.15 record high on Thursday, slipped 21 cents to $44.72 a barrel.
Prices fell after a U.S. government source said on Wednesday two U.S. refiners had requested loans of crude oil from the emergency reserve after Hurricane Ivan disrupted U.S. offshore production and slowed oil imports.
"The market is concerned that there will be a release of SPR oil. Washington could announce it on Thursday. The stocks are for emergency use and that's what we have now," said a broker based in New York.
The government source said officials were reviewing the requests, one for 100,000 to 200,000 barrels and the other for 1 million to 2 million barrels.
The last time Washington loaned oil from the SPR was in late 2002 when Hurricane Lili disrupted shipments into Gulf Coast distribution hubs.
The White House has said it would not withdraw oil from the 670 million barrels reserve, held in underground salt caverns at four sites in Louisiana and Texas, except for a severe supply disruption.
Last month, Vice President Dick Cheney defined such a disruption as the loss of 6-5 million barrels per day (bpd) in U.S. imports. The United States imports about 11 million bpd of crude and petroleum products.
SPR LOAN REQUESTS
U.S. government data showed a drop of 9.1 million barrels in crude inventories in the week to Sept. 17 after Hurricane Ivan thrashed through the Gulf of Mexico, slowing imports and disrupting offshore production.
The fall, the eighth in as many weeks, put national commercial stocks at 269.5 million barrels, the lowest level since February and almost 14 million barrels below a year ago.
The Energy Information Administration (EIA) also reported declines in oil products' tanks, with distillates falling 1.5 million barrels and key heating oil down by 1 million barrels.
Heating oil stocks normally build at this time of year ahead of the northern hemisphere winter. New York heating oil futures have hit record highs.
"The falls in oil product inventories are more significant than the fall in crude inventories. Crude imports will rebound, while restoring balance in oil products will take far longer," said Barclays Capital in a review of the weekly EIA data.
There are also concerns of further supply disruptions from YUKOS , Russia's biggest oil exporter, which is battling bankruptcy from multi-billion-dollar tax debts.
YUKOS's main subsidiary, Yuganskneftegaz, was forced to cut crude output by 35,000 bpd, or 2 percent of YUKOS production, after a power firm cut supplies for non-payment.
Earlier this week, YUKOS said it would trim crude exports via rail to China as it struggled to pay monthly transport costs after its bank accounts were frozen.
Global supplies are straining to meet the fastest growth in oil demand in 24 years. World crude production is close to its limits with only top exporter, Saudi Arabia, holding any significant spare capacity of about 1 million bpd.