Latest hurricane continues to threaten oil price

12 September 2008

Speculation that heating oil prices will rise as a result of the increasing cost of crude oil has continued.

Hurricane Ike's approach to the Gulf of Mexico has led to fears that production will be shut down for a sustained period, refineries having already been closed last week due to Hurricane Gustav.

The latest storm is expected to hit the US coast later today or early tomorrow and according to the Associated Press is currently over 510 miles wide - taking up 40 per cent of the Gulf of Mexico.

Analyst Tetsu Emori told the news source: "You have some refineries shutting to prepare for hurricane damage. That's triggered some buying, especially in oil products such as gasoline and heating oil."

Earlier this week oil producing cartel Opec agreed to cut supply in order to maintain prices, prompting the cost of a barrel of crude oil to rise.

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