BUSINESS

Crude near US$104 a barrel as offshore oil rigs brace for Gulf of Mexico

10/04/2013 03:57 EDT | Updated 12/04/2013 05:12 EST
The price of crude rose to near US$104 a barrel Friday as offshore oil rigs in the Gulf of Mexico braced for Tropical Storm Karen.

Investors were also keeping a close watch on developments in Washington D.C., as the partial shutdown of the U.S. government entered a fourth day.

Benchmark West Texas Intermediate crude for November delivery rose 53 cents to close at US$103.84 on the New York Mercantile Exchange. For the week oil was up 97 cents, snapping a three-week losing streak that knocked $7.66, or seven per cent, off the price of a barrel.

Several oil companies operating in the Gulf of Mexico, including Exxon, said they were taking precautionary measures, including the evacuation of non-essential personnel from offshore installations in the path of the tropical storm that could turn into a weak hurricane over the weekend.

The potential disruption comes amid the budget impasse in the U.S. Some 800,000 federal workers and scores of agencies were idled this week after a sharply divided Congress failed to agree on short-term funding for the government to pay its bills beyond last Monday, when the fiscal year ended.

A prolonged halt to government activities would reduce demand for energy and result in lower prices of fuels such as gasoline. That would be a boon for U.S. drivers but also signal a weak economy.

Brent, the benchmark for international crudes, gained 46 cents to US$109.46 on the ICE Futures exchange in London.

In other energy futures trading on Nymex, wholesale gasoline fell three cents to US$2.61 a U.S. gallon (3.79 litres), heating oil was flat at US$3 a gallon and natural gas rose one cent to US$3.51 per 1,000 cubic feet.

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