Oil price set for further rises, analysts warn

29 August 2008

The price of oil will rise next week if a tropical storm reaches the size predicted, analysts have warned.

Prices have been rising all week as Gustav approaches the Gulf of Mexico and Bloomberg reports that market experts believe further increases are yet to come.

The storm is currently nearing hurricane speeds and has been forecast to be the worst to hit the area since Katrina in 2005.

With the cost of a barrel of oil now at $117 (£64), analyst Tetsu Emori told the news source: "It's quite uncertain now with the storm. Any price gain will depend on the size of the hurricane. The impact of the storm is guiding the price."

Another tropical storm - Hanna - has also formed in the Bahamas, meaning production in the Gulf could be further disrupted.

Rising prices have caused home heating oil costs to increase significantly in recent months, with tensions between Iran and Israel last month prompting record highs.

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