The Scotsman: Hurricane Ivan fuels oil rise: “Shell said that it had shut 270,000 barrels per day of oil production in the eastern Gulf and would evacuate workers from the central Gulf” (ShellNews.net)

Posted 15 Sept 04

WORLD oil prices shot higher yesterday as companies operating in the US Gulf of Mexico braced themselves for the arrival Hurricane Ivan.

US light crude jumped $1.54 to $44.35 a barrel and London Brent crude added $1.20 to $41.40 a barrel.

Ivan, a rare category five hurricane, is expected to enter the Gulf of Mexico today, having veered west from its previous path towards Florida. The Gulf is home to about a quarter of US oil and gas output.

Shell said that it had shut 270,000 barrels per day of oil production in the eastern Gulf and would evacuate workers from the central Gulf by tomorrow. Only when Hurricane Ivan’s northern trajectory becomes clear will the full scale of lost supplies be known.

Oil prices have swung widely in recent days and are almost $6 below the all-time peak at $49.40 struck on 20 August for US crude with dealers nervous over potential supply hiccups as producers pump almost at full tilt.

Daniel Hynes, the industry analyst at ANZ Bank in Sydney, said: "Prices are being pulled from pillar to post at the moment, which is all a consequence of a tight market and will continue as long as demand is so strong and supply is struggling to keep up."

The Organisation of the Petroleum Exporting Countries will review its policy tomorrow and signs were emerging that the producers’ cartel might resist calls to raise official output limits to legitimise actual production.

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