Crude prices surged in Asia Monday as supply of oil and gas from the Gulf of Mexico was curtailed after Tropical Storm Isaac forced the closure of production facilities in the region, analysts said.
New York’s main contract, light sweet crude for October delivery soared $1.35 to $97.50 a barrel and Brent North Sea crude for delivery in October gained $1.40 to $114.99.
The shutdown and evacuation of personnel from production facilities in the Gulf due to Tropical Storm Isaac was fuelling a crude rally, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.
“In the Gulf of Mexico there is this Tropical Storm Isaac that’s threatening the region and has already caused some precautionary shut down of the production facilities there,” he told AFP. “And so the tropical storm in the Gulf of Mexico is the main factor supporting oil at this point,” Shum added. The Gulf of Mexico is the hub of US offshore energy production, accounting for 23 percent of US crude oil output and 7.0 percent of US natural gas production.
The Gulf coast’s facilities also have more than 40 percent of total US petroleum refining capacity and 30 percent of natural gas processing plant capacity. BP said Sunday it was shutting down production at all of its oil and gas platforms in the Gulf and evacuating all staff amid forecasts that Isaac was set to strengthen into a category two hurricane.
Oil soars in Asia on Gulf of Mexico supply disruption
