Crude Oil May Fall After Hurricane Makes Landfall, Survey Shows

By Mark Shenk

Sept. 12 (Bloomberg) -- Crude oil may fall next week after Hurricane Ike makes landfall and refineries and production platforms along the Texas coast resume operation.

Fourteen of 29 analysts surveyed by Bloomberg News, or 48 percent, said prices will decrease through Sept. 19. Twelve of the respondents, or 41 percent, said oil will rise and three said prices will be little changed. Last week 43 percent expected futures to increase.

U.S. refiners were in the process of shutting an estimated 12 percent of U.S. plant capacity yesterday as Ike advanced toward Houston, the largest U.S. petroleum port. The storm is expected to make landfall tomorrow south of Galveston, according to the Miami-based National Hurricane Center.

``The market is likely to slip lower after Hurricane Ike, as Gulf of Mexico production returns to normal,'' said Robert Laughlin, senior broker at MF Global Ltd. in London.

The Organization of Petroleum Exporting Countries said this week that its members will cut production. OPEC agreed to a limit for 11 members of 28.8 million barrels a day, its official target rate. OPEC Secretary-General Abdalla El-Badri said this means it will trim ``oversupply'' by about 500,000 barrels a day.

``The OPEC meeting having passed, there is little bullish news likely to appear,'' Laughlin said.

Crude oil for October delivery dropped $5.36, or 5 percent, to $100.87 a barrel so far this week on the New York Mercantile Exchange. Futures have fallen 32 percent since touching $147.27 a barrel on July 11, the highest since trading began in 1983.

The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.

     Bloomberg's survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:

                   RISE      NEUTRAL    FALL
                    12         3         14

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.