LONDON, Sept 23: World oil prices dipped on Friday after Hurricane Rita weakened further and looked set to spare major US refineries in Texas, analysts said. New York’s main contract, light sweet crude for delivery in November, shed $1.80 to $64.70 per barrel in early trading.
In London, the price of Brent North Sea crude for November delivery lost $1.66 to $62.94 per barrel.
The US National Hurricane Centre said on Friday that Rita has further weakened and was now “at the border of category four and three”, raising hopes that energy facilities in the southern United States may escape the worst.
“We have traded lower on the back of the news that the hurricane has weakened and might not cause as much disruption as first thought,” said GNI-Man Financial analyst Lee Elliott.
“It’s all on the back of the hurricane: it’s looking to swing east, probably missing the refineries that first thought they might have cautionary interruptions.”
With Rita swirling toward the coast, at least 15 refineries in Texas and Louisiana were closed on Friday as operators braced for Rita, the US Department of Energy said.
Some 92 per cent of US oil production in the Gulf of Mexico had been shut down as of Thursday because of the threat posed by the storm and the aftermath of Hurricane Katrina three weeks ago, the US Minerals Management Service said.
Additionally, 74 per cent of the 819 offshore oil platforms in the Gulf and 65 per cent of the 134 wells had been evacuated.
Barclays Capital analyst Kevin Norrish added: “Rita is a very powerful hurricane in the wrong place from an oil industry point of view.”
Hurricane Katrina was a category four storm when it slammed ashore in New Orleans on August 29, devastating the region, closing down US Gulf Coast oil production and pushing up New York futures to a record $70.85 a barrel on August 30.—AFP
