LONDON, Sept 13: Oil prices surged on Monday as Hurricane Ivan threatened production and import activities in the Gulf of Mexico, putting new strains on already tight supplies, traders said.
New York's reference contract, light sweet crude for delivery in October, leapt $1.44 to $44.25. The price of Brent North Sea crude oil for delivery in October jumped 92 cents to $41.12 a barrel in late trading in London.
The market was "largely reacting to the development of this hurricane and the possibility of it heading further west," said Prudential Bache broker Tony Machecek. "This is possibly a temporary reaction by the market. In the longer term it's unlikely to have any devastating effect on supply," he added.
Oil giants Shell, BP and Chevron Texaco evacuated workers from platforms in the eastern Gulf of Mexico because of Hurricane Ivan. The six Shell production sites affected have a daily production capacity of 272,000 barrels of crude oil and 23 million cubic metres of gas. Chevron Texaco said it had already evacuated 667 non-essential personnel and was continuing the process.
BP began pulling some staff from facilities in the Gulf of Mexico over the weekend. Meanwhile the Louisiana Offshore Oil Port, the biggest US oil import terminal, was reportedly preparing to stop offloading tankers.
Opec ministers meanwhile began arriving in Vienna ahead of a meeting on Wednesday to discuss output, though analysts said there was little more the cartel could do to bring down prices.
Qatari Oil Minister Abdulah Bin Hamad al-Attiyah said there was no shortage of oil in the market. He said the Organization of Petroleum Exporting Countries was producing close to its maximum capacity and it was unlikely there would be a decision at the meeting to change Opec's official production ceiling of 26 million barrels per day.
"The message to the market is that the oil is there," he told reporters in Vienna. Opec is also expected to discuss raising its $22-28 per barrel target price band, which is far below current prices. -AFP
