World oil prices eased on Friday, even as Hurricane Rita approached the coast of Texas, on hopes that the weakening storm might cause less damage to oil installations than first feared, dealers said.
New York’s main contract, light sweet crude for delivery in November, gave up 70 cents to $65,80 per barrel in electronic trading.
In London, the price of Brent North Sea crude for November delivery decreased 47 cents to $64,13 per barrel.
Rita was downgraded from a category-five storm to category four overnight by the United States National Hurricane Centre, raising hopes that major oil and gas facilities in the southern states of the US may escape the worst.
“Certainly in the short term, Hurricane Rita is the issue and the market will be waiting to see how much damage is done,” said Victor Shum, a Singapore-based analyst with US energy consultancy Purvin and Gertz. “The market certainly has a lot of volatility.”
However, Rita remains a big storm and the market remains on edge, waiting for it to reach land, he added.
Hurricane Katrina was a category-four storm when it slammed ashore in New Orleans on August 29, devastating the region, closing down US Gulf oil production and pushing New York futures to a record $70,85 on August 30.
Rita is on track to make landfall at Galveston late on Friday, affecting Houston, Texas City, Pasadena and Port Arthur — all home to some of the nation’s largest refineries.
A mass exodus from the deadly threat of Rita emptied towns along the Texas and Louisiana coastlines on Friday, amid frantic last-minute preparations for the second super-storm in a month.
More than one million people piled into cars and buses, creating monumental traffic jams on all roads heading inland, as they sought to escape the predicted path of the hurricane. — AFP