Sam Fletcher
Senior Writer

HOUSTON, Sept. 5 -- Crude prices fell Sept. 4 for the fifth consecutive session as the euro dropped to its lowest level against the dollar this year and oil and gas operations in the Gulf of Mexico and along the Gulf Coast began coming back on stream.

"The euro did get under very serious pressure yesterday, erasing any storm premium left in the oil markets," said Olivier Jakob at Petromatrix, Zug, Switzerland. "The dollar index will face another test on the [Sept. 5] release of the US nonfarm payroll. Our dollar index and oil correlation model is showing West Texas Intermediate over-valued by more than $20/bbl, and in the current trend of the dollar index it is becoming harder and harder to see WTI rising back to previous record highs."

Despite earlier predictions that it would take weeks for Entergy Corp., Louisiana's largest utility, to restore power following the hurricane damage in that state, there were reports Sept. 5 that power had been restored to four of the five idled Louisiana (OGJ Online, Sept. 4, 2008). "The refineries will not return to full capacity on day 1, hence physical premium could remain firm for a few more days; however, with the improved cracks when refineries do return they will be producing more products than before the storm. Hence the futures crack should start to find a ceiling and provide less support to the complex," Jakob said.