World oil prices shot higher today as companies operating in the US Gulf of Mexico braced for output disruptions from powerful Hurricane Ivan.
US light crude jumped $1.27 to $44.08 a barrel and London Brent added $1.03 to $41.23 a barrel.
Ivan, a rare category 5 hurricane, is expected to cross the western edge of Cuba today and enter the Gulf of Mexico tomorrow having veered west from its previous path towards Florida.
The Gulf is home to about a quarter of US oil and gas output. Shell closed 270,000 bpd and ChevronTexaco and Total said they had also shut some output.
Only as Ivan's northern trajectory develops will the scale of lost supplies become clearer.
Oil prices have swung widely in recent days and are almost $6 below the all-time peak at $49.40 struck on Aug. 20 for US crude with dealers nervous over potential supply hiccups as producers pump almost at full tilt.
"Prices are being pulled from pillar to post at the moment, which is all a consequence of a tight market and will continue as long as demand is so strong and supply is struggling to keep up," said Daniel Hynes, industry analyst at ANZ Bank in Sydney.
"I can't see the volatility easing any time soon as long as the supply-demand outlook remains tight."
The Organisation of the Petroleum Exporting Countries will review policy on Wednesday and signs were emerging that the cartel might resist calls to raise official output limits to legitimise actual production.