Oil Prices Take A Break — For Now

Slight Drops In Prices, But For How Long? Analysts Say Just Respite

(CBS/AP)  "With nearly three months to go until the end of the Atlantic hurricane season, which peaks between mid-September and mid-October, more storms — both real and metaphorical — could be on the horizon," Energy Intelligence said on its Web site.

The high demand and tight supply that pushed oil prices to record highs before Katrina haven't gone away, reports Holt, and energy analyst Orrin Middleton of Barclays Capital in London said the price relief was likely temporary because of concerns about refinery capacities.

"The huge rally we got last week shows that it's a product more than a crude problem," he said. "I don't think further OPEC crude is going to alleviate the refinery problem."

He was alluding to comments from OPEC oil ministers suggesting the organization was considering raising its ceiling by up to 1 million barrels when it meets in Vienna next week.

Rafael Ramirez, Venezuela's oil minister, said his country will follow through on its offer to send 1 million barrels of gasoline to the United States as soon as possible to help victims of Hurricane Katrina. Ramirez reiterated the pledge on Monday while at an oil meeting in Jamaica.

Venezuela and Caribbean leaders are close to finalizing deals to supply the region with oil from the South American nation under preferential terms.

Venezuelan President Hugo Chavez was to meet Tuesday in Jamaica with officials from 16 Caribbean countries, and was expected to sign accords establishing the financing and other details of his Petrocaribe initiative.

Chavez has said Venezuela, the world's fifth largest oil exporter, will donate nearly $20 million to help islands build loading docks and fuel storage depots so they can easily receive fuel.