US crude up $3, nears $119/bbl on storm threat

29 August 2008 15:01  [Source: ICIS news]

LONDON (ICIS news)--NYMEX light sweet crude futures gained more than $3/bbl on Friday to take the front-month October contract close to $119/bbl on fears that Tropical Storm Gustav could turn into a hurricane and hit oil facilities in the Gulf of Mexico.

By 13:40 GMT, October NYMEX crude had hit a high of $118.76/bbl, a gain of $3.17/bbl from the previous close of $115.59/bbl, before easing back to around $118.05/bbl.

At the same time, October Brent crude on ICE Futures was trading around $116.20/bbl, having hit a high of $116.75/bbl, a gain of $2.58/bbl from the close.

Crude was also supported by the currency markets as the dollar dipped after negative economic data in the US.

Gustav was expected to present the greatest threat to oil and gas facilities in the Gulf of Mexico since hurricanes Rita and Katrina in 2005.

A number of energy companies with operations in the region were therefore reported to have started shutting in production and evacuating staff from installations.

On Thursday, prices saw an intraday drop of more than $4/bbl as the International Energy Agency (IEA) said that it was prepared to act in case of heavy disruptions caused by the storm.

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By: Giovanni Coiro
+44 20 8652 3214

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