Oil prices rise as Gustav threat looms
Oil prices rebounded on Friday as Tropical Storm Gustav risked becoming a hurricane once more and threatening energy production in the Gulf of Mexico, home to US refineries, traders said.
By Agencies |
LONDON : Oil prices rebounded on Friday as Tropical Storm Gustav risked becoming a hurricane once more and threatening energy production in the Gulf of Mexico, home to US refineries, traders said.
New York's main contract, light sweet crude for delivery in October, jumped 1.37 dollars to 116.97 dollars per barrel in electronic deals.
London's Brent North Sea crude for October gained 1.21 dollars to 115.38 dollars per barrel.
"Tropical Storm Gustav was back in focus, despite reassurances from the IEA (International Energy Agency) and the US Department for Energy that they were ready to tap into emergency oil reserves in case the storm causes significant supply disruptions in the Gulf of Mexico," Sucden analyst Andrey Kryuchenkov said on Friday.
"The focus is likely to remain on Tropical Strom Gustav and potential supply disruptions during the weekend and earlier next week," he added.
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British oil groups BP and Shell and US rival ConocoPhillips had Thursday evacuated workers from their energy installations in the Gulf of Mexico, as the deadly storm loomed. ExxonMobil said it was preparing for the storm and "identifying personnel for possible evacuation to shore."
About a quarter of US crude oil installations are located in the Gulf of Mexico.
Oil prices had fallen sharply on Thursday as traders discounted the threat of the storm. But on Friday, Newedge energy analyst Ken Hasegawa warned: "Still we have to worry about the hurricane's effect on this market."
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Tropical Storm Gustav battered Jamaica on Friday, dumping rain and ripping roofs off homes and threatened to grow into a hurricane after leaving 59 people dead in Haiti and the Dominican Republic. Anxiety also grew on the US Gulf Coast on the third anniversary of Hurricane Katrina and authorities in New Orleans were planning a possible mandatory evacuation to prevent a repeat of the devastation and deaths wreaked in 2005.
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Authorities in Louisiana and Mississippi have already declared states of emergency before Gustav's expected landfall late Monday as a hurricane. Gustav had made landfall in Haiti on Tuesday as a Category One hurricane -- the lowest on the five-level Saffir-Simpson scale -- before weakening into a tropical storm.
Meanwhile, the eighth tropical storm of the hurricane season, dubbed Hanna, was churning in the Atlantic on Friday and has the potential to become a hurricane.
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