US crude falls over $4/bbl as Gustav fears wane

02 September 2008 08:33  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude fell by more than $4/bbl on Tuesday on easing fears of Hurricane Gustav’s threat to key oil facilities in the US Gulf.

 

At 06:15 GMT, October NYMEX light sweet crude futures were trading at $110.86/bbl, down $4.60/bbl on Monday’s close.

 

At the same time, October Brent on London’s ICE Futures was trading at $109.36/bbl, down $0.05/bbl on Monday’s settlement price.

 

The US National Hurricane Center downgraded Gustav to a category one storm as it made landfall near Port Fourchon, Louisiana, on Monday.

 

 

Maximum sustained wind speeds have decreased to 45 miles/hour (75 km/hour), from earlier reported speeds of 115 miles/hour with continued weakening forecast, the centre said, adding Gustav was expected to become a tropical depression later on Tuesday.

 

Commitments by the US government to release crude from the nation’s reserves in the wake of the hurricane also eased fears of possible supply disruptions.

 

Meanwhile, oil, gas and petrochemical companies with facilities in the vicinity of the storm had already prepared plans to determine if they had been damaged during the extreme weather conditions.

 

“As soon as it is safe, ExxonMobil will begin its post-storm assessment process to determine if and how any of our Gulf coast oil and gas production facilities were impacted by the storm,” the company said in a statement.

 

Exxon’s chemicals facility in Louisiana was in the process of a shutdown due to the windy conditions and resulting loss of power.

 

Rival firm Chevron was operating its Pascagoula, Mississippi, refinery at reduced rates as Gustav tracked its way through the Gulf of Mexico and expected normal operations to resume later.

 

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By: Bohan Loh
+65 6780 4359

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