LONDON, July 12: World oil prices soared on Tuesday, rocketing by more than $2 in New York, on concerns that Tropical Storm Emily could end up a hurricane and damage oil rigs in the Gulf of Mexico.
New York’s main contract, light sweet crude for delivery in August, jumped $2.23 to $61.15 per barrel in early deals.
In London, the price of Brent North Sea crude oil for delivery in August gained $1.98 to $59.42 per barrel.
“The market has become preoccupied with Tropical Storm Emily,” said an analyst for a European bank who wished to remain anonymous.
The onset of Emily comes after US oil platforms and refineries had largely escaped Hurricane Dennis.
British oil giant BP said that its oil platform Thunder Horse was listing after Dennis swept through the regions but stressed there had been no leaks or injuries.
Oil rig workers were evacuated from Gulf of Mexico facilities on Friday in the face of the threat from Dennis but have since begun returning to work.
The BP platform, located 150 miles southeast of New Orleans, was “listing following the passing of Hurricane Dennis”, the company said in an official statement. Thunder Horse was due to start production at the end of 2005.
“Early reports confirmed that the platform is listing an estimated 20-30 degrees,” the statement added.
The Gulf of Mexico contains roughly 25 per cent of the United States’ total crude production capacity and pumps approximately 1.5 million barrels per day.
The loss of production “will still have an effect on the stock figures this week”, Sucden analysts said.
The Department of Energy was to release the closely-watched weekly snapshot of US crude inventories data on Wednesday.
“Traders generally expect lower inventory levels for crude and even for gasoline,” said Victor Shum, a Singapore-based partner with US energy consultancy Purvin and Gertz.
The evacuation of US oil rigs led to a 96.2 per cent plunge in Gulf of Mexico production on Monday, according to the Department of the Interior’s Mineral Management Service.
The threat of Hurricane Dennis led to a production loss of around 4.04 million barrels of crude per day over the July 8-11 period, it added.—AFP
