September 8, 2008 / 7:23 PM / 11 years ago

NYMEX-Oil edges up on storm threat, dollar weighs

*Hurricane Ike threatens the Gulf of Mexico

*Dollar jumps on U.S. takeover of mortgage giants

*OPEC seen leaving formal output targets unchanged

NEW YORK, Sept 8 (Reuters) - U.S. crude oil futures edged higher on Monday after a volatile trading session where crude was tugged back and forth by fears of another hurricane entering the Gulf of Mexico and a surge in the value of the dollar.

NYMEX October WTI futures CLV8 CLc1 settled up 11 cents at $106.34 a barrel after trading between $104.70 and $109.89.

Oil jumped in early trading as traders focused on Hurricane Ike, which is poised to enter the Gulf of Mexico later this week but gains were cut back as the U.S. dollar raced to its highest level since October 2007.

The dollar rose as to as much as $1.4055 to the euro on Monday amid a rally in U.S. financial assets after the Bush Administration took over two beleaguered government-sponsored mortgage companies.

The takeover of Fannie Mae FNM.N and Freddie Mac FRE.N is the latest step taken by the government to put a floor under the U.S. housing market and staunch the bleeding at global financial firms. [ID:nL8219845]

Stock markets rose sharply after the news was announced but gave up some gains in afternoon trading.

“The storm threat is an issue but the rising dollar is capping possible gains for crude,” said Jim Ritterbusch of Ritterbusch and Associates in Galena, Illinois.

The weak gains for oil futures came despite strength in RBOB gasoline futures, which were buoyed by sharply higher cash market prices and the threat to refineries from Hurricane Ike.

Cash gasoline on the Gulf Coast traded up as much as 50 cents over the NYMEX RBOB screen in early trading on Monday. [PRO/U]

Three Louisiana refineries with a total of 330,000 barrels per day of capacity were still shut as of Monday, according to Reuters’ surveys of refinery activity.

As many as 12 plants had been shut last week ahead of Hurricane Gustav.

Hurricane Ike was weakening as it passed over central Cuba as of 11 am EDT (1500 GMT) but was anticipated to emerge from the island by Wednesday evening and strengthen over the warm waters of the Gulf of Mexico. [ID:nL8209939]

The latest storm track projection from the U.S. National Hurricane Center showed the storm would hit eastern Texas this weekend as a major Category 3 storm.

Most oil and gas production in the U.S. Gulf of Mexico remains shut-in since last week’s Hurricane Gustav and traders said they expected delays in restarting output because of Ike.

Some 79.4 percent of the 1.3 million barrels per day of normal oil output from the Gulf of Mexico was shut in as of Monday morning, the U.S. government reported. [ID:nEIA001071]

OPEC ministers gathering in Vienna ahead to review output policy were widely expected to leave formal production targets unchanged. [ID:nL8683622]

“The recent decline in prices simply shows that the oil price had risen too high and too fast,” United Arab Emirates Oil Minister Mohammed al-Hamli told the UAE’s official WAM news agency.

NYMEX October RBOB gasoline futures RBV8 RBc1 settled up 6.42 cents at $2.7503 per gallon after trading as high as $2.8380 a gallon.

A weekend fire on Sunday at ConocoPhillips’ 238,000 barrels per day Bayway refinery in Linden, New Jersey, part of the New York Harbor delivery point for RBOB futures, shut an isomerization unit. [ID:nN08422959]

October heating oil futures HOV8 HOc1 settled up 3.03 cents at $3.0131 a gallon after trading as high as $3.1600 a gallon. (Reporting by Robert Campbell; editing by Lisa Shumaker)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below