THE WALL STREET JOURNAL/DOW JONES NEWSWIRES: Crude-Oil Prices Climb To New Settlement High: “…oil loans made to refineries from the U.S. emergency petroleum reserve…”: “Companies such as Shell Transport & Trading Co. sought the loans after Hurricane Ivan disrupted oil imports and production. Shell spokesman Mark Singer confirmed Friday the company had negotiated a crude loan, but wouldn't disclose the terms.” (ShellNews.net)
By LEAH MCGRATH GOODMAN
DOW JONES NEWSWIRES
Posted 25 September 04
NEW YORK -- Crude-oil futures jumped to a new record Friday after some light profit-taking earlier in the session as traders waited to hear details about oil loans made to refineries from the U.S. emergency petroleum reserve.
Crude oil for November delivery rose 42 cents to settle at $48.88 a barrel, a record settlement price on the New York Mercantile Exchange. October natural gas lost 17.9 cents to $5.39 per million British thermal units. October heating-oil futures gained 0.51 cent to $1.36 a gallon, and October gasoline shed 1.8 cents to $1.345 a gallon.
Negotiations with refineries for a "limited quantity" of crude from the Strategic Petroleum Reserve are continuing, the U.S. Department of Energy said Friday.
Companies such as Shell Transport & Trading Co. sought the loans after Hurricane Ivan disrupted oil imports and production. Shell spokesman Mark Singer confirmed Friday the company had negotiated a crude loan, but wouldn't disclose the terms.
While the added supply could briefly weigh on prices, traders don't expect the impact to last long, as oil and natural-gas production continues to struggle in the Gulf of Mexico following Hurricane Ivan.
"I wouldn't be surprised if we ran prices to new highs in the next couple of days," said Aaron Kildow, a broker in New York for Prudential Financial Inc.
Traders were looking for the market to test in the next week or two $50 a barrel -- a level never before reached.
After raking the Caribbean and eastern U.S., remnants of Hurricane Ivan boomeranged back for the Gulf Coast bringing little wind but plenty of rain. The storm washed ashore at the Texas-Louisiana line Thursday night, and forecasters say flood-prone Houston is in its projected path. Of particular concern were refineries in the Houston area and the Houston Shipping Channel, one of the busiest waterways in the U.S.
"Everyone's worried about getting their deliveries of crude oil," Mr. Kildow said. "God forbid, they have to close the Houston Ship Channel for a couple days because of the weather."
For now, channel traffic is moving normally.
After delays, the Louisiana Offshore Oil Port also appeared to be operating normally after resuming oil tanker unloadings Thursday night.
In addition to Ivan-spawned storms, three other weather systems were being closely watched Thursday. Jeanne, with winds of 100 miles an hour, likely will brush the east coast of Florida this weekend and then turn north and northeast, the National Hurricane Center said. The storm probably will approach the South Carolina-North Carolina border by early Tuesday morning, but weaken before then into a tropical storm, it said.
Elsewhere, Hurricane Karl, at 120 mph, stayed on an open-ocean course that threatened only ships, while tropical depression Lisa moved farther into the Atlantic.
On the geopolitical front, rebels threatened to hit oil infrastructure in the Nigerian Delta, forcing oil giant Royal Dutch/Shell to evacuate two oil facilities in Nigeria's southern oil region, the company said Friday. Despite fighting in the area, Shell said there has been no disruption to its production and exports. Shell accounts for roughly half of Nigeria's daily exports of 2.5 million barrels.
In Russia, OAO Yukos continued to clash with government officials over back taxes that could deem it insolvent and further disrupt oil exports. On Friday, President Vladimir Putin said state-owned organizations would be able to bid on the company's assets if they are put up for sale. He has repeatedly said the government's goal isn't to nationalize the company or to see it go bankrupt. But if Yukos's assets were sold to pay off some $7 billion in tax claims, Mr. Putin said "everyone, including government organizations, will be able to bid."
Write to Leah McGrath Goodman at leah.goodman@dowjones.com