Oil prices neared $US49 a barrel, capping a rise of seven per cent for the week, as Gulf of Mexico crude production rebounded at a slower-than-expected rate in the wake of Hurricane Ivan.
Light crude for November delivery rose 42 cents to settle at a new high of $US48.88 per barrel on the New York Mercantile Exchange.
The federal Minerals Management Service reported that daily oil production in the Gulf remained 27 per cent below normal at about 1.2 million barrels per day. The agency said 10 million barrels of oil, the equivalent of 1.7 per cent of annual production in the region, had been lost since last Monday, when offshore producers began evacuating crews.
"There continues to be hope for a quicker rebound in output," said John Kilduff, senior oil analyst at Fimat USA in New York. "Today's figures confirmed that little or no progress was made yesterday."
US oil supplies typically grow this time of year as gasoline demand tapers off and refiners briefly shut down to perform maintenance. Instead, over the past two weeks the nation's supply of crude has fallen by 16.1 million barrels due to Ivan-related disruptions to oil production and shipping, according to the Energy Department.
Refiners have had to use oil held in storage in order to produce gasoline, heating oil and other fuels. To help several refiners in a supply pinch, the Energy Department has agreed to lend them oil from the nation's emergency stockpile. The last time this was done was October 2002, after Hurricane Lili.
However, analysts expect these fuel loans to have limited impact on prices.
The closing price was 18 cents above the previous peak Nymex settlement price of $48.70, set on August 19. Adjusting for inflation, today's prices are still about $US8 below the level reached just before the first Gulf War.
STU Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
