Weather threat to oil supplies

CRUDE oil futures rose as the approach of Hurricane Ivan disrupted production and the arrival of shipments in the Gulf of Mexico, where a quarter of US oil and natural gas is pumped.

Royal Dutch/Shell Group yesterday said it plans to complete evacuations that will idle 272,000 barrels of daily oil output. The Louisiana Offshore Oil Port, the biggest US oil import terminal, said it stopped offloading tankers yesterday.

States along the Gulf receive more than half of US oil imports and are home to 50% of the nation’s refining capacity.

“There is a real concern about the damage it will do,” said John Kilduff, senior vice president of energy risk management at Fimat USA in New York.

“At a time when inventories are getting tight we are now going to see a disruption in production and can only hope that the platforms will be able to reopen quickly,” he said.

Crude oil for October delivery was up $1.19, or 2.8%, at $44 a barrel at 10.13am on the New York Mercantile Exchange yesterday.