Crude rises $1/bbl as US Gulf braces for Gustav

01 September 2008 10:32  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude has gained over $1/bbl as energy companies in the US Gulf shut down operations in anticipation of the threat posted by Tropical Storm Gustav coupled with continued tensions between the West and Russia on Monday.

 

At 08:00 GMT, October NYMEX light sweet crude futures were trading at $116.72/bbl, up $1.28/bbl on Friday’s settlement level.

 

At the same time, October Brent on London’s ICE Futures was trading at $115.30/bbl, up $1.25/bbl on Friday’s settlement price.

 

The region's largest offshore producer, Shell Oil Co, along with fellow producers had shut down their facilities in the Gulf and evacuated workers from the area which accounts for about a quarter of the US’ oil production, as it was feared to be on or near the path of the storm.  

 

“We have completed evacuation of all Gulf of Mexico offshore platform personnel. We have also released all personnel from onshore facilities anticipated to be in or near the path of the storm,” said ExxonMobil.

 

“We have completed a safe evacuation of all personnel. Chevron has shut-in a majority of production primarily due to third party pipeline shut-ins,” Chevron said.

 

Meanwhile, ExxonMobil’s refineries in Baytown and Beaumont, Texas, and in Baton Rouge, Louisiana, were reported to have cut production in response to Gustav.

 

Gustav had sustained wind speeds of 115 miles/hour (185 km/hour) making it a category three and the eye of the storm was expected to hit landfall in Louisiana at midday local time (17:00 GMT), said the US National Hurricane Center.

 

Nearly 2m residents have been evacuated from the Louisiana coast in anticipation of the arrival of the storm, which has sparked fears of a disaster on the scale of Hurricane Katrina which wreaked havoc back in 2005.  

 

Meanwhile, continued tensions between Russia and the West have also supported the rise in crude prices, with the EU to hold an emergency meeting later on Monday demanding Moscow withdraw its troops from Georgia.

 

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By: Bohan Loh
+65 6780 4359

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