As refineries assess the damage caused by Hurricane Rita and the markets worry about possible shortages in oil products, crude oil prices eased after a robust rally on Monday. Light sweet crude for November fell to US$65.07 a barrel on the New York Mercantile Exchange. On London's International Petroleum Exchange, November Brent futures fell to US$62.97 a barrel. Futures have fallen 8.2% since touching a record high of US$70.85 a barrel on Aug. 30, but are 30% higher than a year ago.
Refineries begin to shift production from gasoline to heating oil at this time year. To prevent shortages and keep prices from spiking much above $3 a gallon, oil companies will be under pressure to produce enough gasoline. This could push back production of heating oil back. Currently, the heating oil market seems to be fairly well supplied, but if refineries are down for a long time, that surplus could diminish. Disruptions in crude output can be offset by supply from the rest of the world, and the government's emergency reserve The loss of natural gas is more worrisome, as no such safety valve exists
28-Sep-05 
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