Crude Oil May Rise Amid Low U.S. Inventories, Survey Shows

By Margot Habiby

Sept. 19 (Bloomberg) -- Crude oil may rise next week amid low U.S. inventories in the wake of Hurricanes Ike and Gustav.

Fourteen of 30 analysts surveyed by Bloomberg News, or 47 percent, said prices will increase through Sept. 26. Ten of the respondents, or 33 percent, said oil will fall and six said prices will be little changed. Last week 48 percent expected futures to decrease.

U.S. crude-oil stockpiles fell 6.33 million barrels to 291.7 million barrels in the week ended Sept. 12, the fourth- straight decline, the U.S. Energy Department reported Sept. 17. Gasoline inventories fell 3.31 million barrels, or 1.8 percent, to 184.6 million barrels, the lowest in at least 18 years.

``Inventories have tightened significantly, and the financial market turmoil, which has kept the energy market distracted, has likely seen its worst moments,'' said Chuck Hackett, commodity broker at Access Futures & Options Trading in Woodlake, California. ``A weaker dollar as the Fed injects more liquidity into the financial system is also supportive.''

Oil reached a seven-month low on Sept. 16 as Lehman Brothers Holdings Inc. filed for bankruptcy and Merrill Lynch & Co. was sold to Bank of America Corp.

U.S. energy producers have about 93 percent of oil production and 78 percent of natural-gas output idled in the Gulf of Mexico after hurricanes Gustav and Ike, the U.S. Minerals Management Service, an arm of the Interior Department, said in a statement yesterday on its Web site.

Crude oil for October delivery has dropped $3.30, or 3.3 percent, to $97.88 a barrel so far this week on the New York Mercantile Exchange. Futures have fallen 34 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
                    14          6        10

To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.