Commodity Online
SINGAPORE : Oil rose in Asian trade Monday after oil output were stopped in all flood-prone coastal refineries in the US gulf that lies in the path of hurricane Gustav
US light crude for October delivery rose $1.11 to $116.57 a barrel, having briefly surged above $118 when the New York Mercantile Exchange opened for electronic trading several hours earlier than usual.
London Brent crude rose 97 cents to to $115.02.US RBOB petrol futures outpaced crude gains to rise 5.08 cents, or 1.8%, to $2.9050 per US gallon, as traders feared the refining sector could be harder hit.
But prices pared some bigger earlier gains as traders waited to see whether Gustav would leave lasting damage in its wake after it slams into the Louisiana coast later in the day as a major Category 3 hurricane.
However, oil prices have still barely recovered from last month's three-month low of nearly $111, with buyers cautious even after the steep slump from mid-July's record high $147.27.
Energy companies are taking no chances, shutting down more than 96% of US Gulf oil production and 82% of natural gas output as of Sunday afternoon. The Gulf normally pumps a quarter of all US oil production and about 15% of its domestic natural gas.
At least nine oil refineries with a combined capacity of 2.2 million barrels per day were shut down and six other refineries had reduced throughput because of the storm.
Forecasters predicted Gustav will make landfall west of New Orleans around noon on Monday, local time, with winds expected to be around 200kmh, making it a Category 3 storm on the five-step intensity scale.
Geopolitical tensions between Russia and the West also lent support to oil prices.
Russia does not want a confrontation with the West but will hit back if attacked, Kremlin leader Dmitry Medvedev said on Sunday, a day before EU leaders meet to draft a response to Moscow's actions in Georgia.
Russia, the world's largest exporter of natural gas and the second-largest oil exporter, supplies more than a quarter of Europe's gas needs.
Iran's oil minister said on Sunday $US100 a barrel was the lowest acceptable price for crude oil. Iran, the second-largest producer in the Organisation of Petroleum Exporting Countries, has said the oil market is oversupplied in recent weeks as oil prices have plunged more than $US30 a barrel from their peak.
OPEC meets in Vienna next week to discuss output policy, but other member nations have not come out and publicly backed Iran. Venezuela and Ecuador said on Friday that they expect the oil exporters group to maintain current output levels.
