By Alex Kennedy / AP
Singapore: Oil prices in Asia rose slightly Tuesday to above $115 a barrel on concerns that Tropical Storm Gustav may strengthen and disrupt oil operations in the Gulf of Mexico.
Light, sweet crude for October delivery was up 35 cents at $115.46 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract tumbled $6.59 on Friday to settle at $114.59 a barrel.
“It’s too early to tell if it will intensify into a hurricane or if oil installations will be in its path,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “But the market is reacting to it and edging up some,” he added.
By Monday, reports from a US Air Force Hurricane Hunter aircraft indicated the storm’s top sustained winds had already reached nearly 60 mph (97 kph), the US National Hurricane Center in Miami said. Forecasters said Gustav’s center could pass near or over Haiti on Tuesday.
Floods and landslides were possible across Haiti’s southern peninsula, and the forecasts suggested the eye could pass very closely to the capital of Port-au-Prince, home to nearly 3 million people. On Monday evening, the storm was centered about 165 miles (270 kilometers) south-southeast of Port-au-Prince.
Keeping oil prices from rising further was a stable dollar. Oil prices typically fall when the dollar strengthens as investors buy commodities as a hedge against inflation and weakness in the US currency.
The euro was steady at US$1.4715 on Tuesday while the dollar was little changed at about 109.5 yen.
“Lately, there has been a very strong correlation between oil futures and the US dollar,” Shum said.
In other Nymex trading, heating oil futures rose 1.16 cents to $3.163 a gallon, while gasoline prices gained 0.87 cents to $2.86 a gallon. Natural gas futures increased 9.9 cents to $7.885 per 1,000 cubic feet. In London, October Brent crude rose 42 cents to $114.45 a barrel.