The New York Times: Oil Prices Drop as Driving Season Ends

EXTRACT: Further easing supply concerns, Shell Exploration & Production Co., a unit of Royal Dutch Shell PLC, said its Mars platform in the Gulf of Mexico, which was heavily damaged by Hurricane Katrina, is now pumping 190,000 barrels of oil equivalent per day, or 20 percent more than before last summer’s storm.

THE ARTICLE

By THE ASSOCIATED PRESS
Published: September 7, 2006
Filed at 2:14 a.m. ET

SINGAPORE (AP) — Oil prices fell to five-month lows Thursday amid easing gasoline demand with the end of the summer driving season.

Light, sweet crude for October delivery dropped 4 cents to $67.46 a barrel in Asian electronic trading on the New York Mercantile Exchange.

The contract fell Wednesday by $1.10 to settle at $67.50 a barrel — the lowest closing price for front-month futures since April 7.

U.S. petroleum demand tends to fall after Labor Day, this past Monday, which traditionally marks the end of the summer driving season in the United States.

In addition, easing concerns about the threat to supplies posed by the Iranian nuclear dispute and the Atlantic hurricane season have prompted crude oil prices to fall by about 12 percent in the past month.

Analysts expect the Organization of Petroleum Exporting Countries oil cartel, which meets next week, to maintain its official output target of 28 million barrels per day. And they said if OPEC trims production in an attempt to prop up prices, the strategy could backfire because it would signal to a market that has worried for several years about tight supplies that the world finally has oil to spare.

Further easing supply concerns, Shell Exploration & Production Co., a unit of Royal Dutch Shell PLC, said its Mars platform in the Gulf of Mexico, which was heavily damaged by Hurricane Katrina, is now pumping 190,000 barrels of oil equivalent per day, or 20 percent more than before last summer’s storm.

Traders are keeping an eye on Iran’s diplomatic standoff with the West over Tehran’s nuclear program, though some said they are less worried about an imminent impact on oil markets as the process drags on. Iran announced Wednesday that last-ditch talks on its disputed nuclear program were postponed, moving Tehran a step closer to U.N. sanctions after it defied a deadline to freeze uranium enrichment.

But analysts say they are no longer convinced of a retaliatory oil embargo by OPEC’s No. 2 supplier.

Heating oil prices gained 0.4 cent a gallon while gasoline rose 0.3 cent a gallon. Natural gas futures declined 10.9 cents to $5.885 per 1,000 cubic feet.

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