New tropical storm in the Caribbean could threaten already beleaguered Gulf of Mexico production. Oil prices leapt more than 2 percent early Monday as a new storm forming in the Caribbean took aim at the Gulf of Mexico, threatening to damage oil platforms for a third time this year.
Rising tensions in Iran, the world's fourth-biggest oil producer, also buoyed prices after twin bombings in the southwest oil city of Ahvaz, which Tehran blamed on Britain. At 5:20 a.m. ET (Oct.17), U.S. crude soared $1.65 a barrel to $64.28 in electronic trading. London Brent crude was up $1.47 to $60.95 a barrel.
Prices hit a 10-week low of $60.35 last week on signs high prices were cutting into consumption.
Oil surges on Wilma worries
Concerns about waning demand were eclipsedn Monday by Tropical Storm Wilma, located 155 miles southeast of Grand Cayman, which the U.S. National Hurricane Center said could move into the southeastern Gulf of Mexico by the end of this week. But it also warned that directional currents were weak and "erratic motion" was possible in the coming days.
"It certainly could have an impact on the production and refineries that are up and running today and it certainly would have an impact on the recovery," ConocoPhillips (COP.N) Chairman Jim Mulva told Reuters on Sunday.
Hurricanes Katrina and Rita tore through the Gulf and into the coast in August and September, sharply curtailing oil and gas production as well as refinery operations. As of Friday, some 67 percent of U.S. oil production from the region remained shut while nearly 10 percent of U.S. refining capacity, or 1.63 million barrels per day (bpd), was also idle, keeping traders on edge over tightening oil product supplies.
The new named storm is this year's 21st, tying a record from 1933 with a month and a half still left in the Atlantic basin hurricane season.
Concern about Iran
Geopolitical anxiety moved up a notch in OPEC-member Iran, where five people were killed and more than 80 wounded when homemade bombs detonated in garbage bins Saturday. "We are very suspicious about the role of British forces in perpetrating such terrorist acts," the ISNA student news agency quoted Iranian President Mahmoud Ahmadinejad as saying.
Britain, which has more than 8,000 troops across the border in southern Iraq, has denied any link with the bombs or with a string of attacks this year in Khuzestan province, the center of Iran's oil industry. But the incident has increased tensions.
Oil traders have been on tenterhooks over Iran since the summer as Tehran's persistent pursuit of its controversial nuclear program puts it at odds with the United States, but analysts said Washington might be reluctant to press the issue.
Dealers are also watchful for signs that record energy costs are beginning to eat into economic growth or fueling inflation, factors that could undermine the market's demand-driven rally. Fears that oil consumption growth may stall amid high prices have helped knock U.S. crude down from its $70.85 a barrel record-high at the end of August, although prices are still up 47 percent since January and double what they were two years ago.
Uglavnom, mislim da je kod dealera jos uvijek prisutna tendencija 'go with the flow' dakle 'sto rade drugi to cu i ja', sto dodatno potencira nestabilnost cijena nafte, uz naravno ovakve inpute od strane MainStreamMedia i razvoj situacije oko Irana i PetroEuro burze...rok je sve kraci, treba vec netko krenut u akciju, zasto ne britanci, njih ionako treba izvuci iz Iraka cim prije radi 'mira u kuci'...