Hurricane keeps oil prices close to record high
Oil prices stayed close to record highs today as traders awaited reports on hurricane damage to key production and refining sites in the Gulf of Mexico.
Crude oil for October delivery stood at $68.13 a barrel after peaking at $70.80 ahead of Hurricane Katrina reaching land on Monday.
The price had fallen back to $67 last night, but the overall market remained edgy as the first details of the damage began to emerge.
Shell said an aerial inspection of its Mars platform revealed some “top side” damage at a site that produced around 147,000 barrels of oil a day last year.
The storm led to the evacuation of more than 700 offshore platforms and rigs and came when producers were struggling to cope with demand. The Gulf normally produces 1.5 million barrels of crude oil a day, or about a quarter of the United States’ domestic output.
At least eight Gulf Coast refineries in the path of hurricane shut down or reduced operations on Monday, potentially affecting the supply of products such as petrol and heating fuel in America.
Gasoline and heating oil, which hit new closing highs on the New York Mercantile Exchange on Monday, continued their upward climb today.
In the UK, companies and motorists have been feeling the heat from record oil prices for some time, as the average price of unleaded stands at around 91p a litre and the typical monthly fuel bill nears £100 (€146).
Ray Holloway, of the Petrol Retailers Association, said the squeeze on refinery capacity in the United States could have a knock-on effect on the UK.
He said there had been hopes that the end of the summer driving season in the United States would result in an easing in the cost of fuel.
He added: “In a nervous oil world the hurricane is inevitably going to have an impact on the barrel price.
“An awful lot of speculative money is going into the oil price, several dollars is just there for investment purposes.”
