Oil Prices Stay High as Traders Eye Hurricane Katrina

VIENNA, Austria (AP) -- Oil prices slipped on Friday, a day after a record-setting session, but held above $67 a barrel as traders worried about short-term supply disruptions watched Hurricane Katrina's path in the Gulf of Mexico.

Fears that Katrina would disrupt oil and natural gas production in the region were the main catalyst pushing crude futures to new highs this week on the New York Mercantile Exchange.

Analysts noted that the main thrust of the hurricane season was still ahead. That and concerns about refinery capacities ahead of the Northern Hemisphere winter supported bullish fundamentals, they said.

Light, sweet crude for October delivery was down 19 cents to $67.30 a barrel on the Nymex by afternoon in Europe. The contract settled Thursday at a record $67.49, the highest closing price since oil began trading on Nymex in 1983, after touching $68 earlier in the day.

Gasoline fell nearly half a cent to $1.9600 a gallon while heating oil edged lower to $1.8675.

In London, October Brent crude oil futures on the International Petroleum Exchange were up 3 cents at $66.30 a barrel.

Reports that BP PLC and Royal Dutch Shell PLC evacuated nonessential staff from some of their Gulf of Mexico rigs and platforms as a precautionary measure helped fuel concerns about the possible impact of the hurricane.

Forecasters at the U.S. National Hurricane Center have shifted their forecast path for Katrina further toward the central Gulf -- moving it closer to U.S. oil- and gas-producing regions of the Gulf. [Katrina Update]

Traders are concerned about any potential disruption, however small it may be, because of a thinness in refinery capacity. Last year's Hurricane Ivan damaged Gulf facilities and forced a severe dip in output for several months.

Analysts say this fear is likely to stay and lend support to prices, which are at least 50 percent higher than a year ago. On an inflation-adjusted basis, oil prices would need to hit about $90 a barrel to match the highs of 25 years ago.

"The upward trend seems sustainable. Speculators are looking out for any news to buy on,'' said Ken Hasegawa of Tokyo-based brokerage Himawari CX, forecasting next week's market activity.

Frederic Lasserre, head of commodities research of Paris-based SG Securities, noted that the hurricane season had a ways to go yet.

"The market is still fearing that we might see some more serious hurricanes down the road,'' said Lasserre. That, plus concerns about whether refineries would be able to produce enough heating oil for the coming Northern Hemisphere winter was supporting prices, he said.

Still, "does (all) that justify $65 a barrel? It's difficult to tell,'' he added,

In other market-related news, Ecuadorean protesters agreed late Thursday to end a 12-day strike that had caused important losses to Ecuador's exports.

Nearly all of the Andean nation's exports, or about 290,000 barrels a day, go to the United States, the world's largest energy consumer.

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