Oil prices rose yesterday in Asia on concerns that Tropical Storm Fay may disrupt oil operations in the Gulf of Mexico.
Light, sweet crude for September delivery rose US$1.19 to US$114.96 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell US$1.24 on Friday to settle at US$113.77 a barrel.
“There could be some supply disruption issues there, so the market is watching this closely,” said Mark Pervan, senior commodity strategist at ANZ Bank in Melbourne.
Fay, the sixth storm of the Atlantic season this year, was slowing down early on Monday and moving erratically, but forecasters still expected it to strengthen slowly to a hurricane. Fay has already killed at least five people after battering Haiti and the Dominican Republic with weekend torrential rains and floods.
Oil giant Royal Dutch Shell had evacuated about 360 staff from the Gulf of Mexico over the past two days.
A weaker dollar also supported oil prices. The euro strengthened to US$1.4752 on Monday and the US dollar was steady above ¥110.
A falling US dollar typically pushes oil prices higher as investors buy crude and other commodities as hedges against inflation.
A forecast from OPEC on Friday of lower global oil demand growth helped to keep prices from rising higher.
In its monthly oil report, the organization forecast world appetite for oil this year would grow by 1 million barrels a day, a reduction of 30,000 barrels a day from its previous forecast for demand growth for the year. It also said growth for next year would be 900,000 barrels a day, which it said would be the lowest growth in world demand since 2002.
Demand growth from the major industrialized countries will actually decline, OPEC said, with non-OECD countries accounting for all oil demand growth next year.
In other NYMEX trading, heating oil futures rose US$0.0253 to US$3.1444 a gallon (3.8 liters), while gasoline prices gained US$0.0212 to US$2.8814 a gallon. Natural gas futures fell US$0.18 to US$7.912 per 1,000 cubic feet.
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