Latest tropical storm prompts oil price rise

19 August 2008

Oil prises have risen amid fears that a tropical storm will disrupt production in the Gulf of Mexico.

According to the Economic Times, the cost of a barrel of light, sweet crude finished at $114.12 (£61.06) yesterday as speculation grew over the potential impact of Tropical Storm Fay.

The publication also notes that the Centre for Global Energy Studies' latest monthly report predicts that oil producing cartel Opec will reduce output as a result of recent price falls.

However, it states "there is a danger that the organisation will cut its production too sharply and send oil prices back up".

Although the cost of oil has dropped since reaching a record high over $147 last month, it remains well above the level of one year ago.

Last month Tropical Storm Dolly shut down the production of at least one refinery in the Gulf of Mexico.

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