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 Business News | July 2005 
Storm Could Lift Prices
 Mandi Zonneveldt - Wire services
| | World oil prices climbed on Friday as Hurricane Emily swirled through the southern Gulf of Mexico. |
Oil prices are expected to rise again this week as a strike in Iraq and violent storms off the United States put pressure on world supplies.
Iraq's oil exports were suspended for at least 24 hours yesterday because of a strike by 15,000 employees of the South Oil Company.
The strike affects almost 1.5 million barrels of oil per day that flow through Iraq's southern terminals.
And Mexican state oil monopoly Pemex, a major supplier to the United States, shut 63 wells and brought about 15,000 workers to shore as Hurricane Emily roared towards the Mexican coast.
Pemex said the well closures would mean holding back 480,000 barrels of crude oil per day -- a quarter of its output.
Oil prices rose to a record high of $62.10 this month on concerns Hurricane Dennis would interrupt US supplies.
Prices have fallen since that peak, but rose 29 to $US58.09 a barrel in trading on the New York Mercantile Exchange on Friday.
They are likely to continue to climb, spurred on by the unrest in Iraq and concern about the impact of the storm.
Hurricane Emily was last night strengthening on a southerly track that, if unchanged, would take it over the Yucatan Peninsula near Cancun, Mexico, and then into the western Gulf of Mexico towards the Texan border.
Tony Machacek, a broker at Bache Financial in London, said any deviation towards Texas would have an affect on prices.
"The market will be very concerned about the path of the hurricane," he said.
Dave Pursell, a principal with Pickering Energy Partners in Houston, Texas, said most US offshore oil production occurred in the central Gulf.
But he said storms in the western Gulf posed a risk to the 2.5 million barrels of oil produced from Mexico's offshore fields.
Storms could also halt tanker traffic from the region, he said.
Kerr-McGee Corporation and Shell Oil also evacuated non-essential workers from offshore oil and natural gas production areas that might be affected by Hurricane Emily.
Neither Kerr-McGee nor Shell shut production.
Shell said that 60 non-essential workers from central and western Gulf production areas were evacuated on Friday and non-essential employees from central and eastern production areas were removed on Saturday.
Kerr-McGee was pulling non-essential workers from its Nansen, Boomvang and Gunnison spars in the western Gulf, spokesmen John Christiansen said.
Evacuating non-essentials is often a preparatory step to removing all workers from an area before shutting production, though neither company said it had decided to halt production.
BP is also rushing to make its $1 billion Thunder Horse oil and gas platform storm safe in preparation for Hurricane Emily.
The platform was left listing 20 degrees into the Gulf of Mexico after Hurricane Dennis hit last week.
The company said yesterday pumping continued to remove water from ballast tanks and the platform's angle of list had been reduced to 11 degrees.
The company does not know the cause of the leaning and has said Dennis may not be to blame.
Thunder Horse, which is slated to start producing oil and gas later this year, will provide an extra 250,000 barrels of oil per day in one of the biggest boosts to US production in recent times. |
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