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Oil Prices Rebound Above $66 Per Barrel
NEW YORK, September 19, 2005


(AP) Crude-oil futures rebounded above $66 a barrel Monday amid worries that a storm gaining strength off the Bahamas could hit U.S. oil facilities in the Gulf of Mexico later this week.
The rise came as OPEC ministers met to discuss how to relieve price pressures in the oil market.
Benchmark light, sweet crude for October delivery rose $3.50, or more than 5 percent, to $66.50 a barrel in midday trading on the New York Mercantile Exchange, still more than $4 off its all-time high of $70.85 reached briefly on Aug. 30 after Hurricane Katrina hit the Gulf. Nymex crude had fallen $1.75 on Friday to its lowest closing price since Aug. 5.
Heating oil surged more than 18 cents to $2.02 per gallon, while gasoline rose more than 20 cents to $1.9870.
On London's International Petroleum Exchange, November Brent crude rose $3.13 to $64.94 a barrel.
"The main driver today is Tropical Storm Rita. We really can't afford to lose more production," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago.
In Florida, thousands began evacuating the Florida Keys as Rita built up speed off the Bahamas, about 430 miles from Key West. Rita, which strengthened Sunday into a tropical storm, had sustained winds of 60 mph and was forecast to be in the Straits of Florida between the Keys and northern Cuba on Monday, possibly as a Category 1 hurricane with winds of at least 74 mph, forecasters said.
Long-range forecasts showed the system moving into the Gulf of Mexico late in the week as a hurricane, then possibly approaching Mexico or Texas. But forecasters warned those across the U.S. southern coast, which is still recovering from the impact of Hurricane Katrina, that long-term predictions are subject to large errors.
If Rita strikes Texas, the biggest oil refiner in the country, it could spell serious disruption to the industry. Texas has 26 petroleum refineries with the capacity to pump a total of 4.6 million barrels a day, according to the U.S. Department of Energy.
About half of oil production and 35 percent of gasoline production in the Gulf remains blocked in the wake of Hurricane Katrina, according to the Minerals Management Service.
OPEC oil ministers, meanwhile, debated Monday whether to boost the group's official output ceiling or simply make available 2 million extra barrels a day from reserves.
OPEC President Sheik Ahmed Fahd Al Ahmed Al Sabah, who is also Kuwait's oil minister, said the group was considering whether to increase its current output ceiling of 28 million barrels a day by 500,000 barrels.
Previous OPEC pledges have done little to stabilize prices this year, which spiked on concerns that there is little spare crude left because of rising demand, but officials and analysts have also blamed high prices on the lack of refinery capacity to process products.
"The problem today is the shortage of products, not crude oil," Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said.
Analysts have called OPEC moves symbolic as the cartel is already pumping more than its quota.
Supply concerns are likely to be raised as the Northern Hemisphere winter approaches, when demand for petroleum products such as heating oil, diesel and jet fuel rise.
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Associated Press writer En-Lai Yeoh in Singapore contributed to this article.
(c) MMV The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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