WORLD OIL PRICES HIT $61/BARREL AFTER TEXAS BP REFINERY BLAST
NEW YORK, July 31, 2005 (STAR) (AFP) World oil prices jumped to $61 a barrel on Friday after an explosion at a BP refinery in Texas fuelled concerns about energy supplies toward the end of the year.
New York’s main contract, light sweet crude for delivery in September, reached $61 for the first time since July 13 before closing at $60.57 a barrel, up 63 cents from Thursday’s close.
In London, the price of Brent North Sea crude oil for delivery in September advanced 61 cents to $59.37 a barrel.
"The explosion caused knee-jerk buying across the oil complex. This has also triggered technical buying," Sucden broker Robert Montefusco said.
BP spokesman Robert Wine told AFP there had been a fire overnight at the group’s Texas City refinery in the southern United States, at the same facility where an explosion in March killed 15 people.
"No one has been hurt, we issued just a warning to local residents to close the windows and stay indoors, but there’s been no particular hazards," he said.
When fully operational, the Texas City plant, BP’s biggest, processes 460,000 barrels of oil daily.
"It appears that the plant is 60,000 barrels (a day) down from the blast, but there is a possibility that the blast will not affect production in the long term as they could move the (refining) production to another part of the plant," Montefusco said.
Refineries are working flat out to produce enough heating fuel in time for the northern hemisphere winter later this year. Oil futures reached a record $62.10 per barrel in New York and $60.70 in London on July 7 in the wake of fatal bombings in London.
Fimat analyst Mike Fitzpatrick said "there was still a hangover reaction to inventories", after weekly government figures out Wednesday showed a fall in US crude oil and gasoline stocks.
"Plus we have the refinery problems, and the economy is going at a good pace," Fitzpatrick said.
Data out Friday showed the US economy grew by 3.4 percent in the second quarter to June, down from 3.8 percent in the quarter before, but still enough to suggest robust oil demand in the world’s biggest consumer nation.
Dealers said the market had also reacted Friday to a fire at a small US refinery in Meraux, Louisiana, as well as a deadly blaze at an offshore oil platform near the Indian city of Mumbai.
"Everyone has to be doing 100 percent to keep up with demand. Even outages for small periods affect supply in the market," said Tobin Gorey, a commodities analyst at the Commonwealth Bank in Sydney.
He said the impact of the two fires was "magnified a great deal by the market really producing at full tilt".
At least 11 people have been confirmed dead in the blaze at the Indian offshore oil platform. Oil Minister Mani Shankar Aiyar told parliament that 384 people had to abandon the platform when it caught fire Wednesday.
State-owned Oil and Natural Gas Corp., which owns the platform, said 12 workers were missing.
Reported by: Sol Jose Vanzi
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