Crude futures weakened Monday as the U.S. dollar advanced against other major world currencies, but reports that Brazilian oil workers are initiating a labor strike allowed energy to retrace those losses, leaving prices roughly unchanged.
West Texas crude for August delivery was recently down 22 cents at $144.86 a barrel, and Brent was losing 41 cents at $144.08 a barrel.
Reformulated gasoline futures were flat at $3.55 a gallon, and heating oil was unchanged at $4.08 a gallon. Near-term natural gas was adding 6 cents at $11.96 per million British thermal units.
The Brazilian national oil company,
cut production rates by 136,000 barrels a day in advance of the strike, which is sponsored by the union that represents workers in Brazil's most productive region. While strike organizers have promised not to promote violent or destructive behavior during the strike, they do intend to significantly reduce the company's oil output during the five-day affair. Shares of PetroBras were recently adding 1.4% at $62.59.
Elsewhere, President George Bush announced in a television press conference that he is lifting executive restrictions on offshore oil and gas drilling activity on the U.S. outer continental shelf. The policy move is intended to "increase the supply of oil here at home" and help American consumers who are "feeling the squeeze of rising prices at the pump," Bush said.
The regions of the outer continental shelf that hold the most promise for new oil and natural gas discoveries are in the Gulf of Mexico. The U.S. government estimates that such regions could hold as much as 10 years worth of America's current oil and gas production levels, Bush said.
The policy change must still be approved by Congress before oil companies can begin to explore for resources on the shelf. A heated battle has been raging between Republicans and Democrats on the issue since President Bush first proposed the change one month ago.
Most Democrats say the policy change won't lower consumers' energy costs today since oil wouldn't start flowing from any new offshore wells for at least five years. Proponents of the new policy on drilling say that the economic benefits of lifting offshore restrictions would immediately appear on oil companies' balance sheets and lower oil and gas prices.
Meanwhile, most energy stocks were moving lower.
was down fractionally at $88.02,
was off slightly at $92.13, and shares of
were losing 0.6% at $84.98.
The U.S. Oil
exchange-traded fund, which closely tracks the performance of WTI futures on the Nymex, were recently moving 0.6% lower at $116.74.