Will crude oil prices be supported at current levels?
*Bloomberg, by Grant Smith & Christian Schmollinger, August 27, 2008
“Crude Oil rose for a third day on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production.
Gustav is expected to return to hurricane status before reaching Gulf platforms, according to Jim Rouiller, a senior energy meteorologist with Planalytics Inc., a forecaster based in Pennsylvania. U.S. gasoline inventories probably fell a fifth week, dropping 2.45 million barrels, according to a Bloomberg survey before today’s Energy Department report.
‘The threat of storms like Gustav will prevent oil prices falling further, so we see the market supported above $110 until the end of the hurricane season,’ said Ingrid Angermann, an economist at Dresdner Bank AG in Frankfurt.
Crude oil for October delivery rose as much as $2.26, or 1.9 percent, to $118.53 a barrel on the New York Mercantile Exchange. It was trading at $118.13 at 1:40 p.m. London time. Prices are up 63 percent from a year ago.
Futures have dropped 21 percent from a record $147.27 a barrel reached on July 11. Yesterday, oil rose $1.16, or 1 percent, to settle at $116.27 a barrel.”
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