Update from 2:23 p.m. EDT
Oil prices closed higher Monday on concerns about a new and growing tropical storm in the Caribbean, a refinery fire in Texas, and reports of a weekend bombing in the heart of Iran's oil industry.
The price of light, sweet crude for November delivery closed up $1.73 to $64.36 a barrel. Heating fuel finished up 3.3 cents to about $1.98 a gallon. Gasoline rose 6.7 cents to $1.81 a gallon and natural gas futures rose 63 cents to $13.85 per million British thermal units.
New storm activity in the Caribbean has the market jittery. The National Hurricane Center said Tropical Storm Wilma was growing stronger and could become a hurricane by tomorrow. Wilma is the 21st named storm of the year, tying 1933 as the busiest hurricane season since records began in 1851.
At 2 p.m. EDT, the center of the storm was 235 miles south-southeast of Grand Cayman. Wilma has drifted southward over the past few hours and it is expected to gradually turn west over the next 24 hours. Maximum sustained winds are 45 mph.
The warnings follow the double blasts from Hurricanes Katrina and Rita that severely damaged Gulf of Mexico energy infrastructure. The U.S. Minerals Management Service said that Monday's shut-in oil production for the Gulf of Mexico was 996,291 barrels oil per day, the equivalent to 66.4% of the gulf's daily oil production. The shut-in gas production is 5.498 billion cubic feet per day, or the equivalent of nearly 55% of the gulf's daily gas production.
A fire broke out Sunday as workers were restarting the Lyondell-Citgo gasoline production refinery back online after a shutdown by Hurricane Rita, a company spokesman said. The cause of the fire has not been determined, said Lyondell-Citgo spokesman David Harpole, who could not say when the unit would be restarted. One employee suffered minor burns. The Houston facility is jointly owned by
"This reminds everyone how tenuous the refinery situation still is," said Phil Flynn, senior market analyst at Alaron Trading. "I just have a feeling that right now we will start trying to search for a bottom. I don't think we're necessarily there, but I think we're down close."
On the international scene, two blasts in the Iranian city of Ahvaz killed five people and wounded 95 others, Iranian news reports said.
"We're starting to see some inner tensions in Iran," Flynn said. "A lot people were hoping for reform and they've been disappointed. They have a hardliner back in charge. Just when we see some kind of progress, there's some kind of step backward."
In company news,
chemical unit said it will increase production capacity of isopropyl alcohol, or IPA, at its Baton Rouge, La., plant. IPA is a solvent used in coatings, cleaning, electronics, personal care and pharmaceuticals. It is also a feedstock for the production of agricultural chemicals. The company said the Baton Rouge facility is the world's largest IPA plant. The project is scheduled to be completed in the fourth quarter of 2006.
Independent oil and gas company
said its third quarter production increased 16% despite the combined impact of Hurricanes Katrina and Rita. The company said third quarter production volume averaged 244 million cubic feet of equivalent per day, nearly 5% over the second quarter. The company said it anticipates production growth of 20% or more for 2005. Range said 13 million cubic feet a day remains shut-in and the company expects this shut-in production will be returned to sales late in the fourth quarter.
Refining and marketing company
said its Port Arthur, Texas, refinery should ramp up to full production rates by the end of the week. The facility had been shutdown by Hurricane Rita.
, the world's largest offshore drilling contractor, said it will buy back up to $2 billion of common shares. The Houston-based company said it plans to fund the program with cash and does not intend to use debt to fund share repurchases.
lowered its third-quarter outlook. The company said it is currently producing about 96 million cubic feet of gas equivalent per day, which is 51% of its pre-Hurricane Rita production and 39% its pre-Hurricane Katrina production. Due to the hurricane-related delays, the company said it expects third-quarter net production to range between 16.3 and 18.0 billion cubic feet of gas equivalent, or between 179 and 197 million cubic feet a day. In September, W&T said it expected 21.2 Bcfe for the quarter.