Prices close above $93 for the first time ever as production curtailed at Mexico
Crude oil prices closed above $93/barrel for the first time ever today, Monday, 29 October 2007. Price rose today after dollar hit a new all-time low against the euro and Gulf of Mexico announced that it has to cut production due to poor weather conditions.
For the day ending Monday, 29 October, 2007, crude-oil futures for light sweet crude for December delivery closed at $93.53/barrel (higher by $0.87/barrel or 0.9%) on the New York Mercantile Exchange. Prices rose to $93.8/barrel today earlier in the day during intraday trading. Prices are up 52% on a yearly basis.
Mexico's state-owned Petroleos Mexicanos, one of the largest crude suppliers to the U.S, said that it halted production of 600,000 barrels a day due to bad weather. The company plans to resume production in a couple of days.
Tensions between Turkey and Iraq over Kurdish militants as well as over Iran's nuclear program also helped drive oil prices higher.
In the currency market today, the dollar index, which tracks the U.S. unit against a basket of major currencies, was down 0.1%, with the euro earlier touching record highs at $1.4437. As usual, dollar also dropped on speculation that Federal Reserve might be going for another interest rate cut day after tomorrow.
Petroleum products at strongest levels
Natural gas advanced in New York, following crude oil, after Mexico shut a fifth of its production. Gas for November delivery rose 5.1 cents (0.7%) to settle at $7.269 per million British thermal units.
Against this backdrop, November heating oil reached $2.472 a gallon before ended the session at $2.4646, and November reformulated gasoline rose to $2.3335 a gallon before closed at $2.3274.
At the MCX, crude oil for October delivery closed at Rs 3637/barrel, higher by Rs 42 (1.1%) against previous day’s close. Natural gas closed at Rs 312.9/mmtbu as against previous close of Rs 306.6/mmtbu, higher by Rs 6.3/ mmtbu.
OPEC has planned to boost daily oil production by 500,000 barrels. OPEC's production target is 27.2 million barrels a day, beginning 1 Nov. OPEC, has decided to raise their daily output by 500,000 barrels per day, starting 1 November.
Attacks on oil facilities in Middle East and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.