US crude sinks on limited hurricane damage

02 September 2008 21:12  [Source: ICIS news]

HOUSTON (ICIS news)--NYMEX light sweet crude futures for October delivery settled on Tuesday at  $109.71/bbl, down $5.75 as energy companies in the Gulf of Mexico prepared to resume operations.

Hurricane Gustav appeared to have inflicted only minimal damage to the infrastructure, with shut-in refining capacity and offshore production expected to remain offline for a few days.

Elsewhere, the US dollar rose to a seven-month high against the euro as markets re-focused on demand deterioration.

October crude established an overnight high of $118.60/bbl and plunged to an intra-day low of $105.46/bbl before giving back a good portion of the losses on sentiment that the sell-off had been overdone. With the US markets closed on Monday, prices had to play catch-up with losses posted in Europe during the previous session.

ICE Brent for October delivery lost nearly $5.00/bbl on Monday and sank to $104.14/bbl on Tuesday before settling at $108.34/bbl, down $1.07.

The market will be keeping an eye on OPEC oil ministers’ meeting on 9 September to discuss oil prices and production quotas.

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By: Ignacio Sotolongo
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