WTI Crude Declines as Gulf of Mexico Output Resumes After Storm

 West Texas Intermediate crude fell as Gulf of Mexico production resumed after Tropical Storm Karen passed and on concern the U.S. may breach its debt ceiling.

Futures slid as much as 0.5 percent in New York after companies including Chevron Corp. (CVX), BP Plc and BHP Billiton Ltd. (BHP) returned staff to platforms as Karen was downgraded to a depression and passed by offshore assets. The storm’s threat shut almost 62 percent of Gulf oil production. The U.S. needs to pass a debt-ceiling increase by Oct. 17 or it risks default, according to Treasury Secretary Jacob J. Lew.

WTI for November delivery slipped as much as 53 cents to $103.31 a barrel in electronic trading on the New York Mercantile Exchange. It was at $103.47 at 10:26 a.m. Sydney time. The contract rose 0.5 percent to $103.84 on Oct. 4, capping the first weekly advance in a month. The volume of all futures traded was about 69 percent below the 100-day average.

Brent for November settlement fell as much as 36 cents to $109.10 a barrel on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $5.79 to WTI futures, from $5.62 on Oct. 4.

Before Karen was downgraded, some 866,000 barrels a day of Gulf oil production and 48 percent of natural gas output, or 1.8 billion cubic feet daily, was shut as of Oct. 6, according to the U.S. Bureau of Safety and Environmental Enforcement. Those numbers were cut as workers returned to their platforms.

(Source: Bloomberg)