AP
Oil Prices Climb to $69.68 a Barrel
Thursday August 23, 7:39 am ET
By George Jahn, Associated Press Writer
Oil Prices Climb After Slipping to 8-Week Low on News of Increased US Stockpiles


VIENNA, Austria (AP) -- Oil prices rose Thursday after hitting eight-week lows in the previous session on news of increased U.S. stockpiles.
The U.S. Energy Department reported that crude inventories rose 1.9 million barrels to 337.1 million barrels last week, sending light sweet crude down 31 cents to $69.26 a barrel.

The weekly report also said gasoline supplies fell by 5.7 million barrels, nearly 3 percent, to 196.2 million barrels. U.S. refineries lowered production last week by 0.2 percentage points compared to the previous week, running at 91.6 percent of total capacity.

But easing concerns about oil-related damage from Hurricane Dean contributed to a ceiling Thursday on prices.

By midday in Europe, light, sweet crude for October delivery was up by 42 cents, selling for $69.68 a barrel in electronic trading on the New York Mercantile Exchange. October Brent crude rose 25 cents to $68.95 a barrel on the ICE Futures exchange in London.

Traders were also monitoring Hurricane Dean, which hit the Mexican mainland for a second time Wednesday after striking oil platforms in the Gulf and forcing thousands to flee.

Dean made landfall Wednesday near the port of Tecolutla in Veracruz state on the central Gulf coast as a Category 2 hurricane with maximum sustained winds reaching 100 mph (160 kph). It soon weakened to Category 1 status again, though, and its winds fell to 85 mph (137 kph).

There had been concern earlier that Dean -- then a Category 5, the highest rating for a hurricane -- could severely damage oil infrastructure in the main production area of Mexico's state oil company, Petroleos de Mexico, or Pemex. But Pemex said Wednesday there was no known damage to any production facilities, and on Thursday, Vienna's PVM Oil Associates reported that the company "plans to resume 80 percent of normal oil and gas production by early next week, and full production later in the week."

Still, Pemex evacuated more than 18,000 workers and shut down production in the area ahead of the hurricane. That will mean a production loss of 2.7 million barrels of oil and 2.6 billion cubic feet of natural gas a day, the company said. Of that, about 1.7 million barrels of oil a day is exported from three Gulf ports, where Pemex loaded final tankers on Monday.

Mexico is the third-largest oil supplier to the United States in June, after Canada and Saudi Arabia, providing some 1.39 million barrels a day out of total U.S. imports of 9.92 million barrels a day, according to Energy Department data.

Heating oil and gasoline futures added about half a penny to sell for $1.9540 and $1.8952 a gallon (3.8 liters.) Natural gas futures were flat at $5.570 per 1,000 cubic feet.