Oil: Prices down as Hurricane Wilma spares US rigs

NEW YORK - Oil prices fell on Monday after Hurricane Wilma crashed ashore in Florida, bypassing US production platforms in the storm-weary Gulf of Mexico.

Oil companies operating in the region evacuated more than a thousand workers as Wilma approached, but government data showed only limited impact to production.

US light crude settled down 31 cents to US$60.32, bringing prices well-below the record US$70.85 a barrel struck in late August. London Brent lost 24 cents to US$58.24.

"The market has been sold off after the hurricane headed for Florida instead of the Gulf Coast. So oil production is not affected," said Tony Nunan at Mitsubishi Corp.

After devastating Mexico's Yucatan peninsula at the weekend and making landfall in southwest Florida, Wilma left the Gulf of Mexico's energy producers undamaged.

The 'miss' was good news for the industry, struggling to recover from Hurricanes Katrina and Rita.

As of Monday, some 68 per cent of the Gulf's US oil production remained shut, along with 55 per cent of its gas output, according to the Minerals Management Service.

That is only slightly worse than before Wilma, showing the storm did little more than stall the oil industry's recovery from Katrina and Rita.

The Gulf of Mexico is home to more than a quarter of US domestic crude and gas production.

Fears of further supply disruption were also calmed on Monday after Total's Gonfreville oil refinery, the biggest in France, restarted operations on Saturday following a month-long strike over wages.

At the same time, oil exports from Opec-member Nigeria's 240,000-bpd Brass River tanker terminal resumed at the weekend after protesting unions reached a deal with Italian energy giant Agip, a unit of ENI, ending a three-day disruption.

Oil prices have been sliding since late August, when Katrina first slammed into offshore platforms and coastal refineries, amid evidence high prices were slowing demand -- particularly in the United States.

However, some say demand weakness has been overstated and they predict cold winter weather in the northern hemisphere could soon reverse the trend.

The UK Meteorological Office has predicted a colder-than-average winter for much of Europe, while forecaster EarthSat said last week the US Northeast, the world's largest heating oil market, would be much colder than last year.

Algerian Energy and Mines Minister Chakib Khelil said on Monday he expected crude oil prices to stay above US$50 for the next six months because of limited refinery capacity and strong economic growth.

- REUTERS