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AP Oil Prices Fall, Pump Prices Seen Dropping By BRAD FOSS, AP Business Writer 27 minutes ago NEW YORK - Oil futures fell Tuesday as some Gulf Coast petroleum operatio ns hobbled by Hurricane Katrina slowly recovered and analysts predicted that pump prices, now averaging more than $3 a gallon, would also begin to decline.
Click Here But another financial pinch shaping up for US consumers and businesses in the months ahead is the high price of natural gas, analysts and indus try officials said. And with oil prices still trading near $66 a barrel, European and Asian economic leaders warned Tuesday that their own growt h was likely to slow. Crude futures, which briefly topped $7 0 a barrel last week, also fell on Friday, when industrialized nations a nnounced plans to supply the market with 2 million barrels per day of cr ude oil and motor fuels, including gasoline and diesel. At the retail level, "we'll go below $3 a gallon, but not by much," said oil analyst John Kilduff at Fimat USA in New York. oil analyst Marshall Steeves said the drop in wholesale gasoline prices "will take time to filter down." While oil pipelines, import terminals and some refineries shut down by Ka trina have restarted operations, four damaged Gulf Coast refineries look likely to remain shut for weeks and possibly months, analysts said. The emergency supply of refined products coming from Europe will help, anal ysts said, but it will be more than a week before shipments begin arrivi ng and inventories of gasoline and heating oil will remain tight. Another knotty problem, analysts said, is the potentially long-term loss of natural gas production in the Gulf of Mexico. This is the time of year when utilities typically increase their undergro und storage of natural gas in order to prepare for winter demand. The US does not have an emergency stockpile of natural gas, as it does for crude oil, and the country's capacity for importing liquefied natura l gas is limited. "Natural gas is the one commodity here that I have very little to say abo ut in the way of good news," Kilduff said. Kilduff said his company's forecasting models show the potential for natu ral gas futures to climb to $15 per 1,000 cubic feet in a matter of week s if it turns out there is significant damage to underwater pipelines in the Gulf of Mexico. "After Hurricane Ivan, it took several weeks to know the full extent of t he damage to seabed pipelines," said Steeves. "Some people are quite wor ried that this time could be worse because of the strength of Katrina." That would be bad news for petrochemical manufacturers and others depende nt on natural gas as a raw material and as a fuel source for their plant s, said Paul Cicio, executive director of the Industrial Energy Consumer s of America.
Federal Energy Regulatory Commission said the agency is on the lookout for any evidence of price manipulation in the market. "That does not mean that untoward behavior is indeed happ ening," spokesman Bryan Lee said. Concerns about high energy prices are not limited to the US The chief economist of the Organization for Economic Cooperation and Deve lopment said the financial pain high energy prices have inflicted on con sumers and businesses is far from over. "There is a major shock, and there is no evidence it has reached its conc lusion," Jean-Philippe Cotis said during a news conference in Paris.
European Union ," EU Energy Commissioner Andris Piebals said in Brussels. He said the EU 's executive European Commission was concerned about an impact not only on the well-being of "EU citizens but also regarding their effect on eco nomic growth." Meantime, Pacific Rim finance ministers are concerned about the impact of high oil prices and will emphasize the need to bolster both production and refining capacity when the 21-member Asia-Pacific Economic Cooperati on forum meets this week, according to a draft version of their joint st atement. While half of the eight refineries shut down by Hurricane Katrina are res tarting their operations, 58 percent of normal oil production remains sh ut down, according to MMS data. Major pipelines that carry fuel from the Gulf Coast to markets up and dow n the East Coast, which have been shut down for days due to power outage s, are now back in action.
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