Crude Oil Surges Above $70 per Barrel Due to Hurri
New York, August 29--Crude oil futures briefly surged past $70 a barrel for the first time Monday as Hurricane Katrina barreled toward the heart of U.S. oil and refinery operations in the Gulf of Mexico, shutting down an estimated 1 million barrels of refining capacity.
The Category 4 storm advanced on an area crucial to the U.S. energy infrastructure — offshore oil and gas production, import terminals, pipeline networks and numerous refining operations in the southern states of Louisiana and Mississippi.
Light, sweet crude for October delivery on the New York Mercantile Exchange jumped as much as $4.67 a barrel in Singapore to hit a high of $70.80 a barrel before slipping to $68.95 by midday in Europe. That was still up $2.082 from its close on Friday in New York.
Gasoline traded at $2.1220 a gallon, up 19 cents or nearly 12 percent, while heating oil rose more nearly 14 cents to $1.9750 a gallon.
Katrina has already forced the shutdown of an estimated 1 million barrels of refining capacity and curbing offshore production, but analysts said the storm's potential damage to facilities was even more worrying.
The Gulf of Mexico normally produces 1.5 million barrels of crude oil a day, or about a quarter of the United States' domestic output, according to the U.S. Mineral Management Service.
