Crude oil prices slip below US$60

25-Oct-05

As Hurricane Wilma hit the shores of Florida, avoiding already flattened Gulf of Mexico oil producing and refining facilities, crude oil prices slipped below US$60 a barrel. Light, sweet crude for December delivery slipped to US$59.71 a barrel by midday in Europe on the New York Mercantile Exchange. December Brent crude futures on the IPE in London eased to US$57.59 a barrel. The other factors contributing to slipping prices are discernment of relatively abundant supply and revised assessments showing less damage from hurricanes Rita and Katrina. Wilma made landfall near Cape Romano in southwest Florida, battering the area with 125 mph winds and pounding waves. Large swells sent by the hurricane into the Gulf of Mexico on Friday, forced several operators to evacuate workers and shut down platforms, supporting a brief run-up in crude futures. With the latest shutdown of four companies, more than half of oil and gas production remains off line in the aftermath of recent hurricanes. The approaching Northern Hemisphere winter could spike crude prices if the winter is colder than expected. Oil and related products remain vulnerable to supply tightness, particularly as the Northern Hemisphere winter approaches.