Oil rises in Asia as Ike bears down on Texas coast (12:36 p.m.)
SINGAPORE — Oil prices rose Friday in Asia to above US$101 a barrel as Hurricane Ike swept up from the Gulf of Mexico, prompting companies along the Texas coast to shut down refining and drilling operations.
Light, sweet crude for October delivery rose 39 cents to US$101.26 a barrel in electronic trading on the New York Mercantile Exchange midday in Singapore. The contract fell US$1.71 overnight to settle at US$100.87.
Exxon Mobil Corp., Valero Energy Corp., ConocoPhillips and Marathon Oil Co. have begun halting operations as Ike headed straight for the nation’s biggest complex of refineries and petrochemical plants. Wholesale gasoline prices spiked 30 percent Thursday.
“You have some refineries shutting to prepare for hurricane damage,” Tetsu Emori, a commodity markets fund manager with ASTMAZ Futures Co. in Tokyo.
“That’s triggered some buying, especially in oil products such as gasoline and heating oil.”
Early Friday, the storm was centered about 595 kilometers southeast of Galveston, moving to the west-northwest at 19 kph. Top sustained winds were 160 kph.
The storm was expected to strike the Texas coast late Friday or early Saturday. Forecasters said the storm was likely to come ashore as a Category 3, with winds up to 130 mph (210 kph). The upper Texas coast accounts for one-fifth of U.S. refining capacity.
Ike is huge, taking up nearly 40 percent of the Gulf of Mexico. The National Hurricane Center said tropical storm-force winds of at least 63 kph extended across more than 820 kilometers.
Ike, along with last week’s Hurricane Gustav, has helped keep oil prices from falling faster, as concerns over a slowdown in global economic growth have pushed prices down from a record US$147.27 set on July 11.
“Oil demand on a global basis is quite pessimistic,” Emori said. “If it wasn’t hurricane season, crude would be under US$100 already.”
In other Nymex trading, heating oil futures rose 3.34 cents to US$2.9489 a gallon, while gasoline prices gained 3.38 cents to US$2.7826 a gallon. Natural gas for October delivery rose 6.8 cents to US$7.54 per 1,000 cubic feet.
In London, October Brent crude rose 62 cents to US$98.26 a barrel on the ICE Futures exchange. (AP)
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