Oil Sets Record on U.S. Supply Outage

57 minutes ago Business - Reuters

By Simon Webb

LONDON (Reuters) - Oil prices hit a new record near $51 a barrel on Tuesday as a prolonged U.S. production outage following Hurricane Ivan attracted fresh speculative buying.

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U.S. light crude set a high of $50.91 a barrel in electronic dealing before easing to stand up 77 cents at $50.68 ahead of pit trade.

London Brent moved to a record $47.15 a barrel and by 1345 GMT (9:45 a.m. EDT) was up 67 cents at $46.86 a barrel.

Supply anxiety is building ahead of the northern hemisphere winter, when demand for heating oil surges. Inventories of crude and distillates in the world's top energy user, the United States, are running as much as 4 percent below last year.

American Energy Production Inc. subsidiary, Production Resources Inc., sold 1501 barrels of oil in July and August for total net oil revenue of $46,397.

Bend Arch Petroleum Inc. in July and August sold 4598 barrels of oil and 12,598 MCF of natural gas for approximate total gross revenue of $268,000. Total approximate gross revenues in these two months for Bend Arch Petroleum Inc. and Production Resources Inc. totaled $314,000.

Charles Bitters, President of American Energy Production Inc. stated, "Oil and gas revenues so far in the 3rd quarter increased by approximately 229% over revenues from the entire 2nd quarter with September production still to be added. We are very pleased with the production revenue showing significant incremental increased since the quarter ending December of 2003, when the Company had total production revenues of $6600; followed by approximately $60,000 in the 1st quarter of 2004, $143,000 in the 2nd quarter and now $314,000 for the first two months of the 3rd quarter this year."