Crude Oil Hits $70 on Katrina Fears
PLATTS: Benchmark U.S. light sweet crude futures pulled back to levels just over $69 per barrel in late Asian afternoon trading Monday after being pushed to a record high trade of $70.80 Sunday as the "potentially catastrophic" Hurricane Katrina shut in production and refining facilities in the U.S. Gulf of Mexico.
The New York Mercantile Exchange's October West Texas Intermediate crude contract changed hands at $69.14 at 8:13 GMT Monday, a good $1.66 below the historic high trade notched at 23:05 GMT Sunday, but still $3.01 above Friday's close on NYMEX.
The North Sea benchmark Brent crude on London's International Petroleum Exchange was not trading, on account of a bank holiday in the U.K. Monday.
As Category Five hurricane Katrina gathered strength in the US Gulf over the weekend, oil companies began evacuating offshore staff and shutting in crude and natural gas production as well as refining and certain pipeline transport operations, which sparked a buying frenzy on the NYMEX energy futures.
As a result, NYMEX WTI surged past the $70 psychological barrier for the first time since the launch of the contract in 1983, hitting an all-time high on Access of $70.80. Front-month unleaded gasoline soared 20.31 cents to an all-time high of $2.13 per gallon and front-month heating oil jumped 16.84 cents to a record $2.005 per gallon.
The hurricane was downgraded a notch to Category Four early Monday, but with winds reaching 155 miles per hour, still held the potential to cause extensive damage in the coastal areas of Louisiana, Mississippi, Alabama and Florida.