Commodity Online
NEW YORK : Oil prices rose Wednesday on speculation Hurricane Gustav might enter production platforms in the Gulf of Mexico.

Crude oil for October delivery increased $1.87, or 1.6%, to $118.14 a barrel on the New York Mercantile Exchange. Prices are up 64% from a year ago. Futures have dropped 20% since touching $147.27 a barrel on July 11, the highest since trading began in 1983.

Brent crude on the ICE futures exchange settled $1.59 higher at $116.22 a barrel. Natural gas for September delivery rose 20.7 cents, or 2.5%, to $8.485 per million British thermal units in New York.

Gasoline for September delivery climbed 9.12 cents, or 3.1%, to $3.0609 a gallon in New York. Heating oil for September delivery increased 5.49 cents, or 1.7%, to $3.2648 a gallon.

Futures rose for the third session in a row, and are up more than $3.50 since Friday, as Gustav continued to plod toward the Gulf of Mexico.

The storm, which passed over Haiti, is on course to enter US waters on Sunday, potentially as a Category 3 or 4 hurricane. Landfall is expected along the Louisiana coast on Monday, according to US National Hurricane Centre.

A moderate hurricane in the central Gulf of Mexico could shut down up to 1.3 million barrels a day of oil production for days. In 2005, stronger Category 5 storms knocked out significant production for months. The Gulf Coast is also home to about 40 per cent of US refining capacity, which is vulnerable to hurricane winds and flooding.

The Gulf accounts for about 14% of US gas output. The coast along Louisiana and Texas is home to 42% of US refining capacity.