Crude falls after storm misses Mexican field
Crude oil fell after a tropical storm missed Mexico's biggest oilfield and investors reduced holdings of the commodity.
Arthur, the first tropical storm of the Atlantic hurricane season, has weakened to a depression and missed Mexico's Cantarell oilfield by remaining on land. Hedge-fund managers and speculators reduced bets on higher oil prices by 80 percent since July as crude reached records and US regulators started investigating trading, government data released on May 30 show.
"The first storms of this year's hurricane season have fizzled out without causing damage of note," said Robert Laughlin, a senior broker at MF Global Ltd in London.
Crude oil for July delivery fell as much as $1.82, or 1.4 percent, to $125.52 a barrel and traded at $125.69 at 1:40 pm London time in electronic trading on the New York Mercantile Exchange.
Nymex crude futures reached a record $135.09 on May 22. Prices, which have surged 92 percent in the past year, fell 3.7 percent last week, the biggest weekly drop since March.
By remaining over land, Arthur missed the Bay of Campeche and its Cantarell oilfield, where Petroleos Mexicanos, or Pemex, pumps 1.07 million barrels a day of oil. Earlier forecasts by the US National Hurricane Center showed the storm could strengthen over the Bay of Campeche.
Pemex, the third-largest oil supplier to the US, shut export terminals at the ports of Dos Bocas and Cayo Arcas in the Gulf of Mexico as Arthur brought heavy winds and rains, according to a statement on the website of Mexico's Merchant Marine.
The storm will lose its status as a tropical depression as higher terrain breaks up its rotation, with winds dropping to 46 kilometers an hour before dawn, the US National Hurricane Center said.
Forecasts for a busier hurricane season this year than last prompted Lehman Brothers Holdings Inc's second Brent estimate increase within a month.
Lehman boosted its 2008 outlook 10 percent to $113 a barrel in an analysts' note.
Agencies
(China Daily 06/03/2008 page16)
