Oil price crosses over US$70

31-Aug-05

As the damage to US oil facilities caused by Hurricane Katrina waits to be evaluated, oil prices have crossed over US$70, to settle at just under US$70 a barrel at the end of the day's trading. New York's main contract, light sweet crude for delivery in October, reached an all-time high of US$70.85. In London, the price of Brent North Sea crude oil for delivery in October rose to US$67.57 a barrel. A total of 735 oil and natural-gas rigs and platforms remained evacuated. At least 5 big Gulf Coast refineries were shut, as was the nation's only deep water oil terminal Louisiana Offshore Oil Port. 3 rigs are reported to be missing in the hurricane and at least 9 were said to have lost their moorings. Katrina is estimated to have shut down 95% of crude production and 88% of natural gas output in the Gulf of Mexico, which accounts for 25% of total US oil output. US government seems to be contemplating a request to open up its 700 million barrel Strategic Petroleum Reserve after the hurricane battered crude production on the southern coast and in the Gulf of Mexico.