As a latest tropical storm commenced plotting a course for the Gulf of Mexico Oil, oil futures held firm above US$65 a barrel on Tuesday. Earlier, hurricanes have forced rig and production shutdowns on both the U.S. and Mexican sides of the Gulf, curbing supply. This new cause for possible supply disruption has coupled with lingering supply concerns primarily from Middle East. Light, sweet crude for October on the New York Mercantile Exchange stood at US$65.64 a barrel.
Prices are around 40% higher than a year ago, and could keep climbing, as supply concerns mount and demand fails to wane. U.S. petroleum inventories report is expected to show declines in both crude and gasoline stocks, indicating increasing consumption despite record oil prices in the largest oil consuming nation. Data from South Korea, one of Asia's largest energy consumers, suggests that demand may not slow from the region despite rising prices. Daily global crude consumption is expected to average at 83 million barrels in Q3, spiking to 85.5 million barrels in Q4 of 2005.
Oil prices will continue to climb during H2-2005. The scenario in 2006 will largely depend on oil demand growth and how the Organization of Petroleum Exporting Countries respond.
24-Aug-05 
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