Commodity Online
NEW YORK : Oil prices fell again Thursday after IEA said it would tap strategic stockpiles if Tropical Storm Gustav disrupts energy production in the Gulf of Mexico.
Light, sweet crude for October delivery settled $2.56, or 2.2 per cent, lower at $115.59 a barrel on the New York Mercantile Exchange. Prices are up 61% from a year ago. Oil has dropped 22% from a record $147.27 reached on July 11.
Brent crude oil for October settlement fell $US2.05, or 1.8%, to settle at $US114.17 a barrel on London's ICE Futures Europe exchange.
Oil fell for the first session in four after early on shooting as high as $120.50 a barrel. The market reflected fears Tropical Storm Gustav, now nearing eastern Jamaica, will reprise the hurricanes of 2005 in devastating the drilling rigs, production platforms and refineries that dot the Gulf Coast.
Concerns about the storm's impact led the International Energy Agency, which serves the world's most industrialized nations, to offer to co-ordinate the release of oil stocks from member states if supplies are sharply disrupted in the Gulf.
Separately, the Energy Department said it was ready to tap its 707-million-barrel Strategic Petroleum Reserve if supplies were tied down.
Prices also fell because US stockpiles of natural gas, a competing fuel, increased more than analysts forecast. Supplies rose 102 billion cubic feet to 2.757 trillion cubic feet last week, the US Energy Department said.
Natural gas for October delivery tumbled 55.8 cents, or 6.5%, to settle at $8.05 per million British thermal units in New York.
The Gulf of Mexico is home to 26% of US oil output and 14% of the country's gas production. Katrina closed 95% of offshore output in the region. Almost 19% of US refining capacity was idled because of damage and blackouts caused by Katrina and Rita.
