Oil Prices Ease As Weather Worries Clear

(AP) Oil prices eased Friday as a storm in the North Sea peaked without any serious oil production damage reported that could affect supplies.

News of two shutdowns in the North Sea had earlier exacerbated the overall supply worries. But oil companies operating in the region said Friday that they had begun restarting shut-in output totaling at least 330,000 barrels of oil equivalent a day.

Light, sweet crude for December delivery on the New York Mercantile Exchange fell 55 cents to $94.91 a barrel in electronic trading by midday in Europe. The contract had fallen 91 cents to settle at $95.46 on Thursday after U.S. Federal Reserve Chairman Ben Bernanke said the housing slump and high oil prices, among other factors, will slow economic growth in coming months.

Energy investors worry that any slowdown in the U.S. or global economy will crimp demand for oil and gasoline. The U.S. is the world's largest user of oil, accounting for about a quarter of daily petroleum consumption.

In London, Brent crude fell 50 cents to $92.29 a barrel on the ICE Futures exchange on news that North Sea production was resuming.

StatoilHydro ASA said it restarted production at its Visund oil field early Friday and expects to bring its Oseberg South field back online later in the day. Both fields account for around 110,000 barrels a day of oil production. BP PLC also expects to restart oil and gas production at its 80,000 barrel-a-day Valhall field later Friday as winds in the region ease.

ConocoPhillips said it had no reports of damage to its oil installations in the Ekofisk region after the storm and it was sending evacuated crews back to the closed platforms.

Heating oil futures fell 1.15 cent to $2.5943 a gallon on the Nymex, while gasoline prices fell 0.4 cent to $2.4336 a gallon. Natural gas futures rose 5.7 cents to $7.770 per 1,000 cubic feet.

Oil prices were supported by word of a power outage and fire Thursday at Valero Energy Corp.'s 325,000 barrel a day refinery in Port Arthur, Texas. While it's too early to tell how much production will be affected, the outage added to investor concerns.

Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

Estimates of where crude prices will head from here vary. Many analysts expect prices to rise to at least $100 a barrel, but a growing chorus is warning that futures are due for a sharp downturn soon.

Few analysts believe the underlying fundamentals of supply and demand support such high prices. Many blame speculative investing fueled by the weak dollar for oil's recent run-up. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the U.S. currency is falling.

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