Crude rises more than $1/bbl on Gustav threat

29 August 2008 07:34  [Source: ICIS news]

SINGAPORE (ICIS news)-- Crude futures rose by more than $1/bbl on Friday on a weaker dollar and fears that Tropical Storm Gustav could strengthen to hurricane and threaten major oil and gas infrastructure in the Gulf of Mexico

At 05:50 GMT on Friday, October NYMEX light sweet crude futures were trading at $116.93/bbl, up $1.34/bbl on Thursday’s settlement level. Earlier the contract hit a high of $117.00/bbl, up $1.41/bbl.

At the same time, October ICE Brent futures were trading at $115.44/bbl, up $1.27/bbl on Thursday’s settlement price, having earlier risen to a high of $115.56/bbl up $1.39/bbl.

Tropical Storm Gustav is forecast to strengthen to hurricane force on Friday as it moves into the Gulf of Mexico where some 25% of US oil production is located.

With Gustav expected to present the greatest threat to oil and gas facilities in the Gulf of Mexico since hurricanes Rita and Katrina in 2005, energy companies with operations in the region were reported to have started shutting-in production and evacuating staff from installations.

Meanwhile, the US dollar weakened against the euro on Friday after gaining ground on Thursday following the release of upbeat US economic data.

Friday’s surge in prices follows a fall of over $2/bbl the previous day. Prices had fallen on Thursday after the International Energy Agency (IEA) and the US government said that they would release strategic crude reserves if Tropical Storm Gustav caused major disruptions to oil and gas operations in the Gulf of Mexico.

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By: James Dennis
+65 6780 4359

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