Oil rose more than $1 to above $78 a barrel today, recouping some of the previous session's near 3 per cent loss, on fears a powerful hurricane would cut US oil and gas supplies and also lifted by the falling dollar.
Hurricane Ida roard through the Gulf of Mexico yesterday, where important oilfields are located, after triggering floods and mudslides that killed 124 people in El Salvador, and was expected to weaken gradually today as it heads for some of the facilities in the central Gulf.
US crude for December delivery rose 96 cents to $78.39 a barrel this morning after earlier surging to $78.45. London Brent crude also rose 94 cents to $76.81.
Oil has gained around 70 per cent so far this year but is still about 47 per cent below the record high of above $1.47 hit in July last year.
Hurricane Ida led oil companies to begin evacuating workers on Sunday and prompted the nation's only offshore oil port to stop taking foreign crude from tankers.
Despite the threat Ida poses to US oil supplies, analysts said oil prices are unlikely to stage a strong rally even if some capacity is shut in.
Saudi Arabia, the world's top oil exporter, plans to keep curbs on crude oil supplies steady in December to some of its customers in Asia, industry sources said today.
Underscoring the slim chance that Opec would soon raise supplies, United Arab Emirates Oil minister Mohammed al-Hamli said on Saturday that raising oil production was not currently on the agenda for the producer group.
Oil settled down $2.19 on Friday, after data showed the US jobless rate jumped more than expected to a 26 high of 10.2 per cent in October, raising concerns about a drag on fuel demand.
Reuters