Crude oil futures jumped in electronic trading on Monday, as Tropical Storm Isaac threatened production in the oil-rich Gulf of Mexico.
Oil for October delivery CLV2 +0.93% surged 1.4%, or $1.35, to $97.51 a barrel on the New York Mercantile Exchange during Asian trading hours.
Traders were monitoring the path of the Tropical Storm Isaac as it swept over the Florida Keys late Sunday.
The storm is expected to become a hurricane with 48 hours, a National Hurricane Center (NHC) advisory issued at 8pm EDT on Sunday said. Read more on Tropical Storm Isaac.
“The storm is potentially disrupting supply — this has prompted buying of U.S. crude. Prices will continue to get bullish support due to the storm,” Chung Yang Ker oil analyst at Phillip Futures in Singapore said.
Isaac is expected to move into the eastern Gulf of Mexico early Monday, the NHC said.
Among energy producers operating in the area, BP PLC BP -0.14% BP. -0.20% was evacuating all crew members from its Thunder Horse platform, and other offshore facilities in the Mississippi Canyon, including Na Kika, Horn Mountain and Marlin, and had “temporarily suspended oil and natural gas production there,” BP spokesman Arturo Silva emailed Saturday afternoon.
The Gulf of Mexico accounts for 23% of total U.S. crude-oil production and 7% of natural-gas production, the U.S. Department of Energy says. More than 40% of the nation’s refining capacity is contained in facilities located along the Gulf Coast from Mississippi to Texas.
“Oil prices will continue to be supported by this weather event. Beyond that, we have constant speculation that China and the U.S. may dish out more stimulus, also keeping prices well-supported,” Phillip Futures’ Ker said.
Marketwatch
