Crude futures jumped more than US$1 a barrel yesterday, driven up by concerns that a tropical depression brewing in the Caribbean may grow into a hurricane and could threaten the US Gulf of Mexico and oil facilities there.
Light, sweet crude for delivery next month rose US$1.18 to US$63.81 a barrel in Asian electronic trading on the New York Mercantile Exchange. On Friday, the contract slipped US$0.45 to US$62.63 a barrel.
December Brent futures on the International Petroleum Exchange in London rose US$1.10 to US$60.58 a barrel.
Heating oil gained US$0.0455 to US$1.9955 a gallon (3.8 liters) while gasoline climbed US$0.0569 to US$1.8055. Natural gas rose US$0.662 to US$13.881 per 1,000 cubic feet.
Storm warning
Tropical Depression 24, a slow-moving system that formed on Saturday, was expected to become Tropical Storm Wilma, which would make it the 21st named storm of the season, tying the 1933 record for the most storms in an Atlantic season, the US' National Hurricane Center in Miami said on Sunday.
The depression, now centered about 245km southeast of Grand Cayman, Cayman Islands, could grow into a hurricane by today and move into the southeastern Gulf, with winds over 161kph by Friday, the center said.
Most US oil production and refineries are in the central and western Gulf. Forecasting the storm's direction is extremely difficult at this early stage, but traders are nervous about yet more damage to oil facilities after Hurricanes Katrina and Rita.
"The tropical depression is certainly within the radar screens of traders, though it seems to be too early to tell whether it would develop into a storm, and its direction," Victor Shum, energy analyst at Texas-headquartered Purvin & Gertz in Singapore, said.
Winter demand
After surging above US$70 a barrel in late August, oil prices have fallen in recent weeks, although there are plenty of concerns about the pace of recovery following Rita, and whether supplies will be adequate as winter begins in the Northern Hemisphere, when demand for heating oil peaks.
"The market is on edge; it's looking for directions. There's a lot of volatility now, which is characteristic of a tight supply situation," Shum said.
The US federal Minerals Management Service reported on Friday a slight uptick in Gulf of Mexico oil production, putting the amount of shut-in output at about 1 million barrels a day, or 67.3 percent of total daily output, down slightly from the 68.8 percent seen on Thursday.
There was virtually no improvement in natural gas output, with some 5.65 billion cubic feet a day of output off line, or 56.5 percent of the total, the minerals service said in a daily update.
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