Oil prices bubbled higher on Friday as traders assessed the impact of Hurricane Ivan on supplies, even as another storm loomed.
The price of Brent North Sea crude oil for delivery in November rose by 53 cents to $41,28 a barrel in late-morning trading in London.
On the New York Mercantile Exchange, light sweet crude for October delivery climbed by 26 cents to $44,14 in pre-opening electronic trading.
”Hurricane Ivan has halted around four million barrels of output this week, so it has had an effect on the price,” said Lee Elliott, a trader with GNI-Man Financial. ”It may take a little bit longer to absorb but we do seem to have recovered nearly a dollar on the back of the production cut.”
Analysts at Barclays Capital estimated that five million barrels of oil production had been lost in the United States Gulf, as well as seven million barrels of refinery output.
”While Hurricane Ivan has now passed, there is another hurricane coming behind. Although this is expected to miss the Gulf cost, it could disrupt tankers,” they warned.
Hurricane Jeanne battered Puerto Rico and the Dominican Republic on Thursday, possibly on its way to the US coast.
Jeanne, which was downgraded to a tropical storm, could regain hurricane strength, the US National Hurricane Centre warned. It was located 100km north-east of Santo Domingo at 3am GMT on Friday.
The storm was expected to be near the south-eastern Bahamas later Friday and track along the US coast over the weekend.
Meanwhile, oil companies were starting to assess the damage from Ivan.
Diamond Offshore said Ocean Star, one of its drilling rigs, tore free of its moorings during Ivan and was spotted drifting 18km from where its crew abandoned it ahead of the storm.
ExxonMobil, which had halted production of oil and natural gas in the Gulf, said on Thursday it had not yet begun its damage-assessment process.
According to US Minerals Management Service, workers on 575 platforms and 69 rigs had been evacuated from the Gulf of Mexico.
About 78% of the 1,7-million barrels-per-day of oil production and 49% of gas output in the Gulf was affected.
The biggest US oil import terminal, the Louisiana Offshore Oil Port, stopped unloading tankers on Monday.
But some dealers had feared worse.
”Ivan was not as bad as first thought,” said one trader in London. ”We are looking at platforms, refineries and rigs to be up and running today, and gas production will follow over the weekend.” — Sapa-AFP