Oil prices rebound sharply in Asian trade
World oil prices rebounded sharply in Asian trade on worries Hurricane Ike will threaten production facilities in the oil-rich US Gulf Coast, analysts said.Updated: Sep 08, 2008 08:30 IST
World oil prices rebounded sharply in Asian trade on Monday on worries Hurricane Ike will threaten production facilities in the oil-rich US Gulf Coast, analysts said.
In Asian morning trade, New York's main contract, light sweet crude for delivery in October rose 2.37 dollars to 108.60 dollars a barrel from its close in New York floor trading on Friday.
Brent North Sea crude for October surged 2.57 dollars to 106.66 dollars a barrel.
The hurricane slammed into Cuba on Sunday, becoming the second major storm to hit the island in little over a week, making landfall in the eastern province of Holguin, weather officials said.
Ike, packing 120 mile (195 kilometre) per hour winds, earlier left dozens of people dead in a rampage across Haiti.
"Oil prices are reacting to the threat of Hurricane Ike, which is heading toward the Gulf of Mexico," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"In the short term, hurricanes will determine the price direction of crude oil," he added.
Prices had been declining due to weakening energy demand as global economies slow down.
Shum said the market was also closely watching the results of a policy meeting on Tuesday by oil ministers of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna.
OPEC ministers are expected to wrestle with the issue of falling oil prices. Some analysts were expecting the ministers to agree to trim output to help keep crude above 100 dollars a barrel.