Oil Prices Jump On Storm Movements
Tropical storms in the Gulf of Mexico have led mercantile traders to drive oil prices above $60 a barrel again.
Two tropical storms moving toward US oil rigs in the Gulf made an impact on oil trading. Prices closed in New York at $60.10 per barrel for light sweet crude on the August contracts.
Tropical Storm Cindy reached the Louisiana coast last night and has been bringing heavy downpours of rain to coastal areas. Rainfall of four to six inches has been predicted by meteorologists.
Further south of the coast, Tropical Storm Dennis has been gathering strength and may hit hurricane status on Thursday morning. That storm is roughly following Cindy’s path into the Gulf and could threaten the coastal areas and oil rigs there.
Last September, four hurricanes swept through the area, and oil prices pushed up dramatically in response. With the hurricane season only a month old, the scenario could play out multiple times again this year.
With tropical storms hitting the coast, tankers cannot unload their deliveries of crude. Over half of the arriving imported oil to America gets offloaded there and half of the US refineries reside on the Gulf Coast.
Refineries have been running at very high capacity due to unseasonably high demand for distillate products like gasoline and diesel fuel. And one analyst, Simon Wardell at Global Insight in London, sees $70 prices likely should a storm like Hurricane Ivan wreak destruction this year.
David Utter is a staff writer for WebProNews covering technology and business. Email him here.