Crude Slips Further, $106 Seen as Support Level
Sep 5th, 2008 | By Doug Casey | Category: Financial News, Oil Investment & Alternative EnergyIn the energy market Thursday, crude for October delivery fell to a 5-month low, closing at $107.89/barrel, down $1.46. October reformulated gasoline shed 2.6 cents, to $2.7404/gallon.
In its weekly inventory report, the Energy Information Administration said that crude supplies fell by 1.9 million barrels for the week ended August 29. Gasoline stocks dropped by 1 million barrels while distillates were off 400,000 barrels. Refinery utilization clocked in at 88.7%, of capacity, compared with 87.3% a week earlier.
“Refineries were likely boosting production in anticipation of Hurricane Gustav,” said Chris Lafakis, of Moody’s Economy.com. “Refiner capacity utilization will sharply retrench in next week’s report, as more than 11% of total U.S. refinery capacity is still shut following the hurricane.”
Lafakis added that, “Despite the increase in production, refiners are not producing enough gasoline to keep inventories constant given the current level of gasoline demand.”
Kevin Kerr, editor of Global Commodities Alert, wrote that, “We may see more evidence of the impact of [Hurricane] Gustav in next week’s data, but overall we see strong support at $106 in the oil and it’s likely we will see prices rally once we get to that level.”
Meanwhile, The Energy Department announced on Tuesday that it had received a formal request from Citgo’s Lake Charles, La., refinery for 250,000 barrels of oil from the Strategic Petroleum Reserve, a request the department says it intends to grant.
Source: Crude slips further - $106 seen as support level.
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