Oil Rises Above $60 After Occidental Shuts California Oil Field
By Mark Shenk
Feb. 9 (Bloomberg) -- Crude oil rose above $60 a barrel for the first time in five weeks after an explosion shut down a California field owned by Occidental Petroleum Corp., the fourth- biggest U.S. oil company.
Occidental said about 120,000 barrels of oil and gas liquids a day has been lost after a fire at its Elk Hills site. It is the seventh-largest field on the U.S. mainland. U.S. crude-oil stockpiles last week were 9.8 percent higher than the five-year average for the period, the Energy Department said Feb. 7.
``The reaction to the closure of the oil field in California underlines the supply worries out there,'' said Michael Fitzpatrick, vice president for energy risk management at Fimat USA in New York. ``The field only produces 120,000 barrels of liquids a day. It really isn't going to have a noticeable impact of stocks.''
Crude oil for March delivery rose 46 cents, or 0.8 percent, to $60.17 a barrel at 11:42 a.m. on the New York Mercantile Exchange. Futures touched $60.42, the highest intraday price since Jan. 3. Prices are 1.9 percent higher this week and 4.1 percent lower than a year ago.
``There have been a number of stories that demonstrate that oil supplies aren't to be taken for granted,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``The Occidental field was shut down yesterday, the Hibernia field in Canada is also shut, there are problems with the Cantarell field and Norwegian production is declining.''
Cold Weather
Mild weather in December and early January helped push New York futures to $49.90 a barrel on Jan. 18, the lowest since May 25, 2005. The arrival of colder weather has helped drive prices higher this month.
Home-heating demand in the Northeast, the region responsible for 80 percent of U.S. heating-oil use, will be 23 percent above normal for the next week, said Weather Derivatives, a forecaster in Belton, Missouri. The National Weather Service predicted that below-normal temperatures will persist in the eastern half of the U.S. through Feb. 22.
Crude oil may fall next week on speculation U.S. fuel stockpiles are sufficient to meet heating demand during the remainder of winter. Seventeen of 48 analysts, traders and brokers, or 35 percent, said prices will decline, according to a Bloomberg News survey. Sixteen expected an increase and 15 forecast little change.
Brent crude oil for March settlement was unchanged at $59.03 a barrel on the London-based ICE Futures exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net .
Last Updated: February 9, 2007 11:46 EST |
