World oil prices rose today as Hurricane Ivan reached the US Gulf Coast after shutting more than one million barrels of daily output in the Gulf of Mexico and 13 per cent of refining capacity in the United States.
US light crude climbed 51 cents to a peak at $44.09 a barrel, while London's Brent crude gained 42 cents to $40.77 a barrel.
Ivan, one of the fiercest Atlantic hurricanes on record, began to batter US shores along a 400-mile stretch of the Gulf of Mexico coast.
Oil companies have shut roughly 1.3 million barrels per day (bpd) of offshore crude output in the Gulf, home to 25 per cent of US oil and gas production. Gas production was also reduced as thousands of workers were evacuated from platforms and rigs.
More than 1.5 million bpd of refining capacity along the coast was shut as a precaution with eight plants fully closed and four running partial operations, and the US Coast Guard stopped operations at six ports in Alabama, Florida and Mississippi.
The US government Energy Information Administration yesterday reported a drop in national crude stocks of 7.1 million barrels in the week to September 10th, almost four times bigger than the market forecast of a 1.9 million-barrel fall after a string of storms in recent weeks delayed import deliveries.
The decline, the seventh in as many weeks, left commercial crude tanks at 278.6 million barrels, three million below levels a year ago and the lowest since late February.