Oil sees sharp swing as Gustav makes its way to Gulf of Mexico
Oil prices fluctuated sharply on Thursday as Tropical Storm Gustav spun toward the Gulf of Mexico, with some traders fearing a disruption in supplies and others betting that the US would tap the Strategic Petroleum Reserve if needed.
By Agencies |
NEW YORK: Oil prices fluctuated sharply on Thursday as Tropical Storm Gustav spun toward the Gulf of Mexico, with some traders fearing a disruption in supplies and others betting that the US would tap the Strategic Petroleum Reserve if needed. Gustav, approaching Jamaica with winds near 70 mph, could regain hurricane strength later on Thursday and possibly enter the Gulf as a dangerous Category 3 storm early next week, forecasters said.
US light sweet crude for October delivery jumped as high as $120.50 a barrel before pulling back to $115.05, down $3.05. Light trading heading into holiday weekend exacerbated the volatile trading. Oil rose $1.88 on Wednesday to settle at $118.15 a barrel. Meanwhile, London Brent floated was traded $2.82 down to $113.97 a barrel at the time of
going to press.
Atmospheric models showed Gustav heading toward Louisiana and areas devastated by Hurricanes Katrina three years ago on Friday, though it was too early to pinpoint where it would strike. The storm not only threatens the more than 4,000 oil and gas rigs scattered throughout the Gulf, but also the dozens of oil refineries dotting the vulnerable coastline from Texas to Louisiana.
Oil���s retreat in the face of a possibly dangerous storm surprised some oil market watchers, who attributed the move to speculation that the US administration could release supplies from the Strategic Petroleum Reserve to counter any drop in production from Gustav. Regardless of where Gustav hits, analysts said pump prices are still going to rise at least some, probably in time for Labour Day weekend.
US light sweet crude for October delivery jumped as high as $120.50 a barrel before pulling back to $115.05, down $3.05. Light trading heading into holiday weekend exacerbated the volatile trading. Oil rose $1.88 on Wednesday to settle at $118.15 a barrel. Meanwhile, London Brent floated was traded $2.82 down to $113.97 a barrel at the time of
going to press.
Atmospheric models showed Gustav heading toward Louisiana and areas devastated by Hurricanes Katrina three years ago on Friday, though it was too early to pinpoint where it would strike. The storm not only threatens the more than 4,000 oil and gas rigs scattered throughout the Gulf, but also the dozens of oil refineries dotting the vulnerable coastline from Texas to Louisiana.
Oil���s retreat in the face of a possibly dangerous storm surprised some oil market watchers, who attributed the move to speculation that the US administration could release supplies from the Strategic Petroleum Reserve to counter any drop in production from Gustav. Regardless of where Gustav hits, analysts said pump prices are still going to rise at least some, probably in time for Labour Day weekend.
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