by Staff Writers
London (AFP) Aug 29, 2012
Global oil prices sank Wednesday as a call by the Group of Seven nations for oil producers to increase output offset Gulf Coast supply disruptions due to Hurricane Isaac, analysts said.
In late afternoon London deals, Brent North Sea crude for delivery in October shed four cents to $112.54 a barrel.
New York's main contract, light sweet crude for October retreated $1.07 to $95.26 per barrel.
"Fears that Hurricane Isaac could hit oil supplies in the Gulf have been largely offset by speculation that G7 nations remain ready to tap the strategic petroleum reserve to keep a lid on prices," said CMC Markets analyst Michael Hewson.
"A build-up in (US) inventories over the last week ... has also weighed on the price," he added.
Group of Seven (G7) finance ministers said in a statement issued Tuesday that oil producers needed to increase output, and argued that higher prices posed "substantial risks" to the global economy.
With growth weakening in key economies and tensions over Iran worrying major oil importers, the G7 finance ministers also hinted they were ready to push for the release of strategic oil reserves to prevent a tightening of the market.
"We stand ready to call upon the International Energy Agency to take appropriate action to ensure that the market is fully and timely supplied," the statement said.
Meanwhile, analysts said that output in the US Gulf of Mexico was expected to return to normal in the wake of Hurricane Isaac, while the market was pressured by signs of weak US crude demand.
"Oil prices have ... retreated as damage from Isaac appears insignificant, and production is expected to resume quickly," added GFT analyst David Morrison.
About 93 percent of Gulf of Mexico production, or 1.3 million barrels per day, had been shut in before Isaac strengthened to a hurricane late on Tuesday.
"It is now believed that the overall damage will be lower than expected, and largely limited to flooding effects onshore," said PVM Associates analyst Tamas Varga.
Hurricane Isaac battered New Orleans on Wednesday, flooding homes and driving stormy waters over the top of at least one levee, seven years to the day after Katrina devastated the city.
Isaac, was packing vicious winds of 80 miles (130 kilometers) per hour and rolling slowly over Louisiana, dumping huge quantities of rain on the renowned US jazz city as residents cowered in their homes.
Separately, the US Department of Energy announced Wednesday that American crude stocks surged 3.8 million barrels in the week ending August 24, suggesting weakening oil demand in the world's biggest economy.
The data confounded market expectations for a drop of 1.5 million barrels, according to analysts polled by Dow Jones Newswires.
Powering The World in the 21st Century at Energy-Daily.com
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Yoko Ono leads stars against 'fracking'
New York (AFP) Aug 29, 2012
John Lennon's widow Yoko Ono and their son Sean Lennon on Wednesday launched "Artists Against Fracking" to oppose the technique for natural gas extraction in an important New York state water region. "It seems that the city will be assaulted with dirty water," Ono, 79, told a press conference. "It's not fair for our children to ignore this." Sean Lennon, 36, also attacked fracking, short ... read more
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