Oil Prices Gush Higher As Traders Eye Hurricane

by Jerome Rasetti
LONDON, Sept 14 (AFP) - World oil prices streaked higher again on Tuesday as traders grew increasingly anxious about the prospect disruption to supplies from the Gulf of Mexico from Hurricane Ivan.
The price of benchmark Brent North Sea crude oil for delivery in October climbed 64 cents to 41.70 dollars a barrel in early deals in London.
"We have a very strong opening this morning," said Lee Elliott, a trader with GNI-Man Financial.
"Everyone is turning their eyes to Hurricane Ivan. They are worried about the disruptions it can cause when it goes through the refineries in the Gulf of Mexico," he added.
New York's reference contract, light sweet crude for delivery in October, rose 58 cents to 44.45 dollars a barrel in pre-opening electronic deals.
Prices had already jumped by over a dollar in New York Monday as oil firms evacuated workers from platforms in the Gulf of Mexico and the biggest US oil import terminal, the Louisiana Offshore Oil Port, stopped unloading tankers.
The Miami-based US National Hurricane Center said early Tuesday the storm was moving into the Gulf of Mexico, 90 kilometers (55 miles) west-northwest of the western tip of Cuba and that a hurricane watch had been issued for the Northern Gulf coast of the United States.
"For the energy markets, the movement of Hurricane Ivan has dominated short-term prices," Barclays Capital analysts wrote in morning note.
"Ivan is currently headed towards the Gulf of Mexico, home to about a quarter of US oil and gas production, with a number of companies already shutting some operations.
"At this stage, Ivan is not expected to directly hit the bulk of oil and gas production but with the supply chain so tight, any possible disruption is having a price impact," they added.
In Iraq assailants sabotaged a key pipeline pumping oil exports from northern Iraq to Turkey, striking 60 kilometres (38 miles) west of Kirkuk after dawn, Colonel Emad Abdullah Obeidi of the Iraqi police said.
It was not immediately clear whether exports were affected.
Meanwhile ministers of the Organization of Petroleum Exporting Countries gave mixed signals on whether the cartel might raise output at a meeting in Vienna on Wednesday.
OPEC kingpin Saudi Arabia said OPEC did not support current high levels of oil prices, but blamed speculators for the market rally.
"The fundamentals do not support this price and OPEC does not want this price," Saudi Oil Minister Ali al-Nuaimi told reporters in the Austrian capital.
"OPEC is doing its part, but OPEC is not the only player in town and people want to make money," he added.
Saudi Arabia would continue to pump 9.5 million barrels of oil per day (bpd) as long as there was demand and it had the capacity to produce an extra one million, possibly more, if the need arose, the minister said.
But Kuwait said it backed an OPEC production hike of at least 500,000 bpd, while Algeria said the cartel should raise its official production ceiling by about two million bpd to reflect more closely its actual output.
However, Venezuela said it opposed an increase in output quotas.