Oil prices rise, but end up lower for the week

GEORGE JAHN

Saturday, Oct. 22, 2005 | 11:03 a.m.

Crude-oil futures rose Friday as traders kept a wary eye on the path of Hurricane Wilma heading into the weekend. But prices ended the week down 3 percent because forecasters expect it to miss oil and gas facilities in the Gulf of Mexico and because there are signs that supplies are building.

Light sweet crude for December delivery rose 61 cents to settle at $60.63 a barrel on the New York Mercantile Exchange. Last Friday, oil futures closed at $62.63 per barrel.

December Brent crude futures on London's International Petroleum Exchange rose 57 cents to settle at $58.48 a barrel.

Heating oil fell by less than a penny to $1.8655 per gallon, while gasoline futures rose 2.68 cents to $1.6399 per gallon.

Natural gas futures were down 10.5 cents to $12.872 per 1,000 cubic feet.

Oil's slide this week reflects diminishing concerns about supply shortages following earlier hurricane damage to oil and gas platforms in the Gulf of Mexico, traders said.

The U.S. government's latest petroleum inventories report showed domestic crude and gasoline stocks rose.

"The situation has completely changed since the beginning of October," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.

Oil prices have declined 14 percent since reaching $70.85 a barrel on Aug. 30, after Hurricane Katrina made landfall.

Emori attributed the U.S. petroleum inventory increases to the release of 60 million barrels of oil equivalent by the International Energy Agency after Katrina devastated Gulf of Mexico oil facilities.

"The release of crude and gas stocks from the IEA provided a good cover against the shortage expected after the hurricanes," Emori said, adding the move has now shown to have helped keep overheated oil prices in check.

The 26-nation IEA comprising mainly industrialized oil-importing countries agreed Thursday to complete the release of emergency oil stocks launched to plug supply shortages after Katrina, but decided against any further measures.

The governing board of the IEA reviewed the global oil supply situation and the stock draw announced last month, and said it remains prepared to take "additional coordinated action" to address future shortages if needed.