Monday September 18, 2006

Crude oil falls to 5-month low as natural gas inventories surge

bloomberg.com :

Crude oil fell to the lowest in more than five months, following natural gas, after an Energy Department report showed that U.S. inventories of the competing fuel jumped. Gas stockpiles rose 108 billion cubic feet, reaching 3.084 trillion cubic feet. Some manufacturers and utilities can switch between oil-based fuels and natural gas depending on costs.

Crude oil for October delivery declined to $63.22 a barrel on the New York Mercantile Exchange, the lowest close since March 22, down 2.9% from a year ago. Natural gas for October delivery fell to $4.892 per million British thermal units, the lowest close since Sept. 16, 2004, down 56% from a year ago.

U.S. refineries usually curb crude oil deliveries in September and October when they shut units for maintenance as the end of the vacation season cuts gasoline demand and before winter demand for heating-oil begins. "This is a time of year when it's not unusual for there to be price weakness because demand falls," said Phil Flynn, vice-president at Alaron Trading Corp. in Chicago. "Prices should rise once we approach the heating season and demand picks up."

See also :

1. Oil rout deepest in 16 yrs
2. Crude oil falls below $64 on forecast for lower global demand

(2006-09-18 12:39:45 SGT) [Energy] Permalink

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