Oil soars in Asia on Gulf of Mexico supply disruption

 
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Oil soars in Asia
Singapore, Aug 27: Crude prices surged in Asia today 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 USD 1.35 to USD 97.50 a barrel and Brent North Sea crude for delivery in October gained USD 1.40 to USD 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 per cent of US crude oil output and 7.0 percent of US natural gas production.

The Gulf coast's facilities also have more than 40 per cent of total US petroleum refining capacity and 30 percent of natural gas processing plant capacity.

BP yesterday said 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.

The shutdown will include BP's Thunder Horse platform, the world's largest offshore production and drilling facility which has a capacity of 250,000 barrels of oil and 200 million cubic feet of natural gas per day.

AFP

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