Crude oil prices reach US$51 in New York
(Xinhua)
Updated: 2004-10-06 10:51

Crude oil futures jumped above 51 dollars a barrel Tuesday amid concern that hurricane damage to production in the Gulf of Mexico would keep supplies from rising enough to meet winter needs.

On the New York Mercantile Exchange, crude oil for November delivery rose 1.18 dollars to end at 51.09 dollars per barrel. Oilprices reached 51.29 dollars a barrel, the highest intraday pricessince 1983. Meanwhile, on London's International Petroleum Exchange the November Brent crude-oil futures contract climbed 94 cents to finish at 47.13 dollars a barrel, the highest intraday price since 1988.

The US produced 27 percent less oil than normal in the Gulf of Mexico because of damage from Hurricane Ivan three weeks ago.

With the hurricane disruption to the Gulf and the heating-oil season approaching, there was significant concern about the adequacy of fuel inventories. The storm had cut a total of 15.3 million barrels of oil production since Sept. 13 and US heating-oil stockpiles in the week ended Sept. 24 were 9.7 percent below the average for this time of year in the last five years.

The Energy Department said the Northeast region consumed 80 percent of the nation's home heating oil. The typical home in the region might consume an estimated 697 gallons of the fuel this year at an average cost of 1.60 dollars per gallon. It might be the costliest winter ever for heating oil users.

Surging oil prices had taken toll on the low-income households,which would have to cut spending on health care and foods to keep their houses warm this winter.

Rising fuel costs also contributed to a combined 3.99 billion dollars loss during the first six months of this year for the 10 largest US air carriers.

Some analysts were convinced a speculative bubble had formed. They said prices had become inflated as institutional investors, such as hedge funds and mutual funds, bet on the surging crude oilprices.

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