By Duncan Sutherland- Exclusive to Crude Investing News

Barrel prices were pushed gently northward in early trading on Monday, as a confluence of factors threatened supply and made it an attractive alternative investment. The dollar’s decline relative to the euro increased anti-inflation hedging activities in commodities. Simultaneously, Tropical Storm Fay’s Gulfward path prompted some precautionary rig shutdowns as the National Hurricane Center confirmed the possibility of Fay becoming a hurricane. Monday’s early gains appeared fleeting, as the price is continuing to settle as I write.

An interesting look into OPEC’s preferred barrel prices is upcoming at the meeting in September. Though all members have seen huge boosts to their revenue streams in recent years, and especially since last autumn, the organization appears to be reassured by the recent price decline, fearing extensive demand destruction. Some are suggesting that should barrel prices drop below $100, members will try and game the market with output cuts.

Ironically, the lack of organizational solidarity makes it more difficult to predict the constituent members’ actions. Usually, the one state to watch is Saudi Arabia, which just last week ended its temporary supply increase, equivalent to 1.5% of OPEC shipments. It is unlikely that the Kingdom will cut exports further, and indeed may boost its supply if the American administration calls in a favour.

Hilmi Guler, Turkey’s energy minister has confirmed that flow through the Baku-Tbilisi-Ceyhan should be reinstated by the end of this week. The pipeline was forced to shut before the Georgia-Russia “warlet” due to Kurdish rebel attacks.

Though the BTC’s integrity is good news for oil markets, BP has seasoned it with the information that an Azerbaijan-Georgia-Black Sea railway line has been significantly damaged due to the war, and oil shipments along it have ceased. The eventual resumption of export will depend largely on Russia, as the railway passes through the occupied city of Gori. The Georgian government claimed that Russia had destroyed a crucial bridge along the railway line, but then suggested it would be up and running within a week. I don’t know how advanced Georgian bridge-building technology is, but it seems that at least one of the above claims is less than entirely truthful.

Enterprise Products Partners (NYSE:EPD) and Teppco Partners (NYSE:TPP) have agreed to construct a $1.8 billion import terminal on the Texas Gulf Coast that will be the largest American oil port (in term of capacity) when it begins operations in 2010. The port is to be located 36 miles from the coast and will pipe imports to the extensive Texas refinery network.

Some 40% of capacity is already contracted to ExxonMobil (NYSE:XOM) and Royal Dutch Shell (NYSE:RDS.A). Significantly, the Texas Offshore Port Systems (TOPS) will be able to dock the Ultra Large Crude Carrier (V-Plus) supertankers, whose +3 million barrel capacity makes them the largest tankers in the world. Until TOPS opens, the Louisiana Offshore Oil Port (LOOP) will remain the only US import terminal able to handle such supertankers.

Hope you enjoyed Benchmark this week.

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