Oil above USD 85 as US refineries survive hurricane

Singapore, Aug 29: Oil prices hovered above USD 85 a barrel today in Asia after a hurricane left minimal damage among refineries along the US East Coast.

Benchmark oil for October delivery was up 11 cents to USD 85.48 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose 7 cents to settle at USD 85.37 on Friday.

In London, Brent crude for October delivery was down 45 cents at USD 110.91 on the ICE Futures exchange.

Tropical Storm Irene packed hurricane-force winds when it slammed into the East Coast near North Carolina this weekend and headed north into New York. The storm was blamed for at least 21 deaths, widespread severe flooding and more than 4 million homes and business losing power.

Oil refineries in the region have so far reported no major damage. The National Hurricane Center on Monday, 29 said that Irene was maintaining 50 mph maximum sustained winds as it neared the US-Canada border.

"The greatest impact from the storm is likely to be the impact on regional economic activity caused by flooding and power outages," JP Morgan said in a report.

"These could take some time to restore to normal, and is therefore likely to reduce petroleum demand in the interim."

After jumping from USD 84 in February to near USD 115 in May then sliding back down to USD 76 earlier this month, crude has traded close to USD 85 for the past week as traders look for evidence of the severity of the slowdown in economic growth in the US and Europe.

AP