US crude falls $1/bbl as storm fears wane

19 August 2008 09:03  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude futures fell by more than $1/bbl on Tuesday, as concerns over Tropical Storm Fay faded after it failed to disrupt oil and gas operations in the Gulf of Mexico as it moved into the Florida Keys.

At 06:46 GMT on Tuesday, September NYMEX light sweet crude futures were trading at $111.89/bbl, down 98 cents/bbl on Monday’s settlement level. Earlier the contract hit a low of $111.64, down $1.23/bbl.

At the same time, October ICE Brent futures were trading at $111/bbl, down 94 cents/bbl on Monday’s settlement price, having earlier fallen to a low of $110.70 down $1.24/bbl.

Tropical Storm Fay is set to reach the southwest Florida mainland, after hitting the islands of the Florida Keys on Monday, with expectations that it could rise to hurricane force.

However, the passage of Fay has not resulted in the significant loss of production or damage to oil and gas infrastructure in the Gulf of Mexico.

Meanwhile, economic worries in the US and Europe and fears over a resultant decline in demand added further downside pressure to the crude market.

Russia announced that it had started to withdraw its armed forces from Georgia. However, there was reported to be little firm evidence thus far of a military pull back. Tensions remained high between Russia and the West following the Russian occupation of Georgian territory.

Georgia is an important transit hub for the export of Azeri crude from the Caspian region into western Europe. However, the Russian invasion had resulted in a substantial disruption to the flow of Azeri crude through Georgia

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By: James Dennis
+65 6780 4359

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