CORRECTED-Oil prices rise amid Gulf of Mexico storm, Middle East tensions

Reuters

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 (Corrects paragraph 2 to show Brent hit an intraday high of
$67.65 on Thursday, not $67.52)
    SEOUL, July 12 (Reuters) - Oil prices rose on Friday as U.S.
oil producers in the Gulf of Mexico cut more than half their
output in the face of a tropical storm and as tensions continued
in the Middle East.
    Brent crude  LCOc1  futures were up 37 cents, or 0.6%, at
$66.89 per barrel by 0115 GMT. The international benchmark
settled down 0.7% on Thursday after hitting its highest since
May 30 at $67.65 a barrel.
    U.S. West Texas Intermediate (WTI) crude  CLc1  futures were
up 34 cents, or 0.6%, at $60.54 a barrel. The U.S. benchmark
closed 0.38% lower on Thursday after marking its highest since
May 23 at $60.94. 
    By Thursday, oil companies in the Gulf of Mexico had cut 
more than 1 million barrels per day (bpd) of output, or 53% of
the region's production, due to Tropical Storm Barry.
 urn:newsml:reuters.com:*:nL2N24C0AP
    The storm was forecast to become a category one hurricane
with at least 74-mile-per hour (119 km-per-hour) winds.
 urn:newsml:reuters.com:*:nL2N24C0N7
    "Brent crude oil ... extended its gains as storms in the
Gulf of Mexico halted production of oil and U.S. oil inventories
continued to recede more than expected," ANZ Bank said in a
note. 
    U.S. crude oil inventories have decreased for four
consecutive weeks. U.S. crude stocks fell 9.5 million barrels in
the week to July 5, the Energy Information Administration (EIA)
said, a drop that was more than triple the 3.1 million-barrel
draw expected by analysts.  urn:newsml:reuters.com:*:nL4N24B07W 
    Meanwhile, Iran's alleged attempt to block a British-owned
tanker heightened tensions in the Middle East in the wake of
attacks on tankers and the downing of U.S. drone by Iran in
June.  urn:newsml:reuters.com:*:nL8N24C4PP
    "While a full-scale military conflict remains the least
likely scenario, the strong increases for cost of insurance will
make for a most costly transportation of crude and see new
routes explored, delaying crude arrivals," said Edward Moya,
senior market analyst at OANDA in New York. 
    But a lower 2020 oil demand outlook from the Organization of
the Petroleum Exporting Countries kept price gains in check.
OPEC said the world would need 29.27 million bpd of crude from
its 14 members in 2020, down 1.34 million bpd this year.
 urn:newsml:reuters.com:*:nS8N1ZH05W 

 (Reporting by Jane Chung; Editing by Joseph Radford)
 ((jane.chung@thomsonreuters.com; +82 2 3704 5667; Reuters
Messaging: jane.chung.thomsonreuters.com@reuters.net))

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