Related Stories — Report: Isaac seen making release of U.S. strategic oil likely. Analysis: Isaac threatens Gulf Coast oil refineries
Oil prices are rising again this morning on forecasts that U.S. crude inventories will drop because of disruptions from Tropical Storm Isaac in the Gulf of Mexico. Oil for October delivery rose as much as 87 cents to $96.34 a barrel on the New York Mercantile Exchange. Crude futures rose in early trading yesterday before falling back later in the day.
The price swings are likely to continue as Isaac strengthens in the Gulf and heads toward land. So far, it remains a tropical storm and forecasters expect it to hit the Louisiana coast late today or early tomorrow.
As the storm advances, energy companies continue to pull crews from offshore rigs in its path, shutting down about 78 percent of the oil production in the Gulf. As of midday yesterday, 346 platforms and 41 rigs in the Gulf have been evacuated, according to the Bureau of Safety and Environmental Enforcement. U.S. crude stockpiles probably fell by 2 million barrels last week, Bloomberg News reported, and the declines could continue as production shutdowns from the storm continue.
About half of Louisiana’s refining capacity is now shut down, as companies including Phillips 66, Valero, Marathon and Exxon Mobil are reducing production rates at Gulf Coast facilities, driving gasoline futures higher, Reuters reported.
In the oil markets, the uncertainty about the production impact from Isaac is offset by concerns over a fire at Venezuela’s biggest oil refinery, now in its fourth day.