Oil prices moved higher Thursday, recovering some of the week's sharp losses, ahead of U.S. data expected to show big declines in crude and product stockpiles due to disruption from Hurricane Katrina.
At 5:50 a.m. ET, U.S. light crude rose 58 cents to $64.95 a barrel in electronic trading, after plunging $1.59 on Wednesday. The market has fallen 8 percent from a record $70.85 last week, after industrialized nations began to tap emergency reserves.
London Brent crude rose 56 cents to $63.45 a barrel.
Traders are looking to U.S. government data on oil inventories due later Thursday for further direction on the damage to the U.S. oil industry, after the storm rampaged through the Gulf of Mexico last week.
Analysts surveyed by Reuters forecast a 6.4 million-barrel drop in weekly crude stocks, which would still leave them well above year-ago levels. The figures come a day later than usual because of a U.S. holiday, reports CNN Money.
Katrina may slow U.S. economic growth by as much as 1 percentage point over the rest of the year, the Congressional Budget Office said yesterday. The European Central Bank today said there is a risk that record oil prices will push up wages and fuel inflation in the 12 nations using the euro, signaling it sees no scope for lower interest rates.
“The loss of crude and refining capacity will make the situation very difficult this winter,” said A.F. Al-Hajji, energy economist and professor at Ohio Northern University. “Oil prices will stay high for the foreseeable future.”
Average regular-grade gasoline pump prices in the U.S. yesterday fell to $3.03 a gallon from $3.042 a gallon the day before, according to the AAA motorist group. Prices across the nation reached a record $3.057 a gallon, on average, on Sept. 2. Yesterday, the highest average price was $3.383 in Washington D.C. That was offset by prices of less than $2.75 in Alaska, Louisiana and Mississippi. Prices averaged $3 to $3.05 a gallon in states including Indiana, Michigan, and West Virginia, informs Bloomberg.