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Oil bounces back after refinery outage
Source: Associated Press Publication date: Mar 09, 2000
Crude oil prices rebounded somewhat Thursday from a drubbing that raised questions about how much oomph is left in the year-long bull market, reversing course when a refinery shutdown in Texas renewed worries about dwindling supplies.
Gasoline, too, climbed back 4 percent higher as energy commodities increased across the board. In other futures markets, hogs and copper advanced.
A day after a nearly $3-a-barrel tumble -- the biggest price drop since 1990 and highest one-day percentage decline since December 1998 -- crude showed staying power above the $30 threshold. Light, sweet crude for April delivery rose 43 cents to $31.69 a barrel on the New York Mercantile Exchange.
The gains came late in an up-and-down session on news that a 67,000-barrel-a-day unit at a refinery in Deer Park, Texas, had been shut down due to a problem discovered in an inspection on Wednesday.
The outage turned out to be much less serious than traders initially thought, and the gasoline-producing unit at the refinery -- a joint venture of Shell Oil and the Mexican state oil firm Pemex -- was restarted late Thursday. But with U.S. and world stockpiles perilously low, the market hypersensitive to any supply disruption.
"This refinery outage underscores just how nervous this market is right now about supplies," said Phil Flynn, energy markets analyst for Alaron Trading Corp. in Chicago.
The rise came despite word from Mexican Oil Minister Luis Tellez that his country and Norway -- top producers who are participating in the Mideast cartel's clampdown on output -- will hike production in April, a move OPEC is increasingly likely to follow.
"OPEC is talking, and it looks like we're going to get a raise in production," said Flynn. "But we're going to go back to reality, which is that even if they raise production, we're still tight in supplies."
April unleaded gasoline rose 3.62 cents to 98.80 cents a gallon, April heating oil rose 1.15 cent to 76.46 cents a gallon and April natural gas rose 7.6 cents to $2.786 per 1,000 cubic feet.
April Brent crude from the North Sea rose 49 cents to $29.29 a barrel on London's International Petroleum Exchange.
Hogs rose 2.2 percent to a one-month high on the Chicago Mercantile Exchange after beef prices leaped to the highest level this year. Analysts said that should prompt retailers to save money by buying more pork loins in place of beef.
April lean hogs rose 1.30 cent to 60.75 cents a pound.
Copper jumped higher on the Comex division of the New York Merc on a technically driven rally helped by the rise in U.S. stock markets. Copper prices often rise and fall with economic data, as its fate is closely tied to the health of the construction industry and demand for new housing.
May copper settled up .95 cent at 79.90 cents a pound.
Publication date: Mar 09, 2000 ) 2000, NewsReal, Inc.
-- Carl Jenkins (Somewherepress@aol.com), March 10, 2000