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Oil prices breach $116 in Asia

Oil prices breach $116 in Asia
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First Published: Mon, Sep 01 2008. 11 04 AM IST
Updated: Mon, Sep 01 2008. 11 04 AM IST
By Alex Kennedy / AP
Singapore: Oil prices rose Monday in Asia to above $116 a barrel on expectations Hurricane Gustav will damage drilling and refining operations as it approaches the Louisiana coast.
Light, sweet crude for October delivery was up $1.04 at US$116.50 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract slipped 13 cents on Friday to settle at $115.46 a barrel.
“There’s no question the drilling platforms in the Gulf of Mexico and the big refineries between Houston and New Orleans are in the path of this hurricane,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
“There’s likely to be some damage. We could see an extended period of disruption,” he added.
Forecasters said Gustav was moving faster than expected as it marched toward the coast with top sustained winds of around 115 mph (185 kph).
Early Monday, the National Hurricane Center said Gustav was a Category 3 storm centered about 175 miles (280 kilometers) southeast of the mouth of the Mississippi River and moving northwest near 17 mph (27 kph).
About 1.9 million people have left the Louisiana coast region, the largest evacuation in state history, and thousands more had left from Mississippi, Alabama and flood-prone southeast Texas.
Gasoline prices
The average retail gasoline price in the US was up slightly to $3.995 a gallon Sunday from $3.991 the previous day, according to auto club AAA, the Oil Price Information Service and Wright Express. Gasoline prices peaked on 17 July at $4.114 a gallon.
The storm has already killed at least 94 people on its path through the Caribbean, and comes three years after Hurricane Katrina killed 1,600, mostly from flooding in New Orleans.
Royal Dutch Shell PLC, BP PLC and Transocean Inc. have evacuated employees from rigs in the Gulf region. In 2005, Katrina and Hurricane Rita destroyed 109 oil platforms and five drilling rigs.
Keeping prices from rising further are concerns that the credit crisis that began in the US last year has spread to other developed countries and may undermine global demand for crude.
“Worries about an economic slowdown spreading to the euro zone and worries that oil demand growth in emerging markets may slow later this year are creating the current bearish sentiment in the oil market,” Shum said.
In other Nymex trading, heating oil futures rose 4.48 cents to $3.2367 a gallon, while gasoline prices gained 5.96 cents to $2.9138 a gallon. Natural gas for October delivery fell 19.3 cents to $7.75 per 1,000 cubic feet.
In London, October Brent crude rose 96 cents to $115.01 a barrel.
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First Published: Mon, Sep 01 2008. 11 04 AM IST