Oil Prices Slip As Wilma Winds Hit Fla. Monday October 24, 6:42 am ET By George Jahn, Associated Press Writer Oil Prices Slip As Wilma Avoids Gulf of Mexico Oil Producing and Refining Facilities
VIENNA, Austria (AP) -- Crude oil slipped below $60 a barrel Monday as Hurricane Wilma's strongest winds began hitting Florida, avoiding already battered Gulf of Mexico oil producing and refining facilities.
Analysts also said perceptions of relatively plentiful supply and revised assessments showing less damage from previous hurricanes also contributed to the downward trend.
Wilma, a strong Category 3 system, seemed destined to make landfall near sunrise near the Naples-Marco Island area on Florida's southwest coast. The hurricane had sent large swells into the Gulf of Mexico on Friday, forcing several operators to evacuate workers and shut down platforms, and supporting a brief run-up in crude futures.
Light, sweet crude for December delivery slipped 93 cents to $59.70 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract closed Friday at $60.63 a barrel, up 61 cents up.
December Brent crude futures on the International Petroleum Exchange in London also eased, falling 84 cents to $57.64 a barrel.
Heating oil fell 3 cents to $1.8340 a gallon, while gasoline dropped 3 cents to $1.6075 a gallon. Natural gas fell 24 cents to $12.632 per 1,000 cubic feet.
There was more relief Monday that Wilma was staying out of the way of Gulf facilities, said commodity strategist David Thurtell of the Commonwealth Bank of Australia in Sydney.
After moving slowly through the Caribbean and along the Mexico coast, Wilma picked up speed and strength. Part of the hurricane's eyewall, which contains the strongest winds, was buffeting land in the area where landfall was expected Monday.
Wilma stayed on track to spare the oil and gas production platforms and rigs concentrated in the central Gulf of Mexico, but analysts warned the hurricane season's threat to oil and gas facilities in the U.S. Gulf was not over.
At least four companies operating in the U.S. Gulf evacuated nonessential workers and shut down production platforms ahead of the weekend. With the latest shutdowns, the federal Minerals Management Service said Friday more than half of oil and gas production remains off line in the aftermath of recent hurricanes.
"The hurricane season goes on till the end of November, so we're not out of the woods yet," Thurtell said. "But at least the chances of another hurricane forming are getting narrower and narrower."
Traders also watched the approach of the Northern Hemisphere winter, with some expecting big run-ups in crude prices if the winter is colder than expected.
Angus McPhail of ING Financial Markets in Edinburgh, Scotland, said oil and related products are still "vulnerable to supply tightness, particularly as we get into the Northern Hemisphere winter.
"This is not a (permanent) downturn," he said.
Associated Press Writer Gillian Wong in Singapore contributed to this report.
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