Oil rises above $75 on storm worries

Oil rises above $75 on storm worries

Gillian Wong / AP

Singapore: Oil prices rose Wednesday, 5 September, on expectations that the Atlantic hurricane season would intensify, and that a midweek US government petroleum data would report declines in crude and gasoline stocks.

Light, sweet crude for October delivery rose 11 cents to $75.19 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract rose $1.04 to settle at US$75.08 a barrel Tuesday.

A US hurricane expert Tuesday predicted that five more hurricanes are likely this season. Two of the hurricanes would be major, said Colorado State University forecaster William Gray.

Hurricane Felix slammed into Central America near the Nicaragua-Honduras border as a Category 5 storm early Tuesday, then weakened, but it has largely spared oil and gas infrastructure in the Gulf of Mexico.

Traders were also eyeing the release of US government data Thursday expected to show domestic crude oil and gasoline stockpiles fell.

Analysts surveyed by Dow Jones Newswires predicted gasoline stocks would decline by 1.1 million barrels in the week ended 31 August , and that refinery utilization would rise by 0.2 percentage point to 90.5%.

With the minor increase in refinery activity, analysts expect that crude oil stocks will fall by 1.1 million barrels. Distillate stocks, which include heating oil and diesel fuel, are predicted to build by 100,000 barrels.

The report by the US Energy Department’s Energy Information Administration, which is normally released on Wednesdays, will be delayed by one day due to Monday’s US Labor Day holiday.

Reports of problems at Port Arthur, Texas, refineries operated by Motiva Enterprises LLC and Valero Energy Corp. also supported prices, as did a general expectation that the Organization of Petroleum Exporting Countries will hold production steady when members meet next week.

October Brent crude added 7 cents to $73.99 a barrel on the ICE futures exchange in London.

Nymex heating oil futures rose 0.38 cent to $2.0833 a gallon (3.8 litres) while gasoline prices were flat at $1.991 a gallon. Natural gas futures gained 8.1 cents to $5.71 per 1,000 cubic feet.