Oil Rises as Gustav Approaches Gulf Infrastructure
August 27th, 2008Via: Reuters:
Oil rose for a third day on Wednesday, lifted by the possibility that Tropical Storm Gustav could become the first major storm since 2005 to threaten U.S. Gulf oil and gas installations.
U.S. crude for October delivery was up $2.98 at $119.25 a barrel after adding $1.16 on Tuesday. London Brent crude gained $2.31 to $116.94 a barrel.
Oil could head towards last week’s near-three-week high of just above $122 a barrel in the next few days depending on Gustav’s path, said Masaki Suematsu, analyst at broker Newedge in Tokyo.
“Gustav is headed right toward the centre of the Gulf of Mexico. Hurricanes taking this route are usually threatening,” he said.
Gustav was downgraded to a tropical storm on Wednesday after it came ashore in Haiti, but forecasters expect wind speeds to regain hurricane force as it crosses over warm waters south of Cuba.
Most hurricane-path computer models show Gustav headed towards rigs off Louisiana and Texas, home to a quarter of U.S. crude oil and the centre of U.S. refinery operations.
