Oil tumbled to US$98 a barrel yesterday on signs Hurricane Ike may have spared key US energy infrastructure and as turmoil in the US financial system fanned global economic concerns.
US crude fell US$3.18 to US$98.00 a barrel by 0834 GMT to fresh six-month lows after a special trading session on Sunday held because of Hurricane Ike.
Oil also fell on concern that the US economy is slowing, reducing demand for fuels.
US oil had dropped below US$100 briefly on Friday for the first time since early April.
London Brent crude fell US$2.95 to US$94.63 a barrel.
Energy firms rushed to offshore facilities and coastal refineries to check for damage on Sunday after Hurricane Ike’s direct hit on the Houston energy hub left a quarter of US oil and refined fuel production idled and millions without power.
A total of 14 Texas and Louisiana refineries, with combined crude processing capacity of 3.57 million barrels a day, are shut because of Ike.
Early reports from emergency officials and oil companies indicated little or no severe damage to infrastructure — signaling a possible quick recovery to production —- though near-term supply problems were expected.
“We think in probably a week to 10 days we should have a majority of the refineries back up,” said James Cordier, founder of Tampa-based OptionSellers.com from New York. “Very little damage was done.”
The US Department of Energy released 309,000 barrels from its strategic reserves to ConocoPhillips and Placid Oil, which had trouble with supplies after the storm.
“The sell-off is partly because Hurricane Ike hasn’t done significant structural damage to oil facilities as well as growing concerns about the economy,” said David Moore, commodities strategist for Commonwealth Bank of Australia.
“It has been quite a spectacular turn of events at Lehman and Merrill and the stresses in the financial system are sparking concerns about economic outlook and how that will weigh on global energy demand,” he said.
“It looks like we’ve dodged another bullet,” said Peter Beutel, president of energy consultant Cameron Hanover Inc in New Canaan, Connecticut. “The refineries in the Houston area seem to have come out of the storm remarkably intact.”
Super Typhoon Kong-rey is the largest cyclone to impact Taiwan in 27 years, the Central Weather Administration (CWA) said today. Kong-rey’s radius of maximum wind (RMW) — the distance between the center of a cyclone and its band of strongest winds — has expanded to 320km, CWA forecaster Chang Chun-yao (張竣堯) said. The last time a typhoon of comparable strength with an RMW larger than 300km made landfall in Taiwan was Typhoon Herb in 1996, he said. Herb made landfall between Keelung and Suao (蘇澳) in Yilan County with an RMW of 350km, Chang said. The weather station in Alishan (阿里山) recorded 1.09m of
NO WORK, CLASS: President William Lai urged people in the eastern, southern and northern parts of the country to be on alert, with Typhoon Kong-rey approaching Typhoon Kong-rey is expected to make landfall on Taiwan’s east coast today, with work and classes canceled nationwide. Packing gusts of nearly 300kph, the storm yesterday intensified into a typhoon and was expected to gain even more strength before hitting Taitung County, the US Navy’s Joint Typhoon Warning Center said. The storm is forecast to cross Taiwan’s south, enter the Taiwan Strait and head toward China, the Central Weather Administration (CWA) said. The CWA labeled the storm a “strong typhoon,” the most powerful on its scale. Up to 1.2m of rainfall was expected in mountainous areas of eastern Taiwan and destructive winds are likely
The Central Weather Administration (CWA) yesterday at 5:30pm issued a sea warning for Typhoon Kong-rey as the storm drew closer to the east coast. As of 8pm yesterday, the storm was 670km southeast of Oluanpi (鵝鑾鼻) and traveling northwest at 12kph to 16kph. It was packing maximum sustained winds of 162kph and gusts of up to 198kph, the CWA said. A land warning might be issued this morning for the storm, which is expected to have the strongest impact on Taiwan from tonight to early Friday morning, the agency said. Orchid Island (Lanyu, 蘭嶼) and Green Island (綠島) canceled classes and work
KONG-REY: A woman was killed in a vehicle hit by a tree, while 205 people were injured as the storm moved across the nation and entered the Taiwan Strait Typhoon Kong-rey slammed into Taiwan yesterday as one of the biggest storms to hit the nation in decades, whipping up 10m waves, triggering floods and claiming at least one life. Kong-rey made landfall in Taitung County’s Chenggong Township (成功) at 1:40pm, the Central Weather Administration (CWA) said. The typhoon — the first in Taiwan’s history to make landfall after mid-October — was moving north-northwest at 21kph when it hit land, CWA data showed. The fast-moving storm was packing maximum sustained winds of 184kph, with gusts of up to 227kph, CWA data showed. It was the same strength as Typhoon Gaemi, which was the most