Oil price surged to record US$67.4 over storm fear
(Xinhua)
Updated: 2005-08-25 11:53

Oil prices surged with a record high with 67.40 dollars a barrel Wednesday, due to concerns about a storm that could enter the Gulf of Mexico later this week and a decline in US domestic gasoline inventories.

Crude oil for October delivery rose 1.44 dollars to 67.40 dollars a barrel in afternoon trade on the New York Mercantile Exchange. That tops the previous intraday high of 67.10 dollars hit on August 12.

Tropical Storm Katrina, which formed Wednesday morning in the Bahamas could reach hurricane strength and attack the coast of Florida later this week. The National Hurricane Center said the storm is expected to cross the state and head into the Gulf of Mexico, dropping a foot or more of rain.

Oil companies have shut down facilities in the Gulf as precaution against storm damage.

"As with most storms, we think the fear factor is exceeding the likely impact on production here,"said Timothy Evans, an analyst at IFR Energy Services in New York. Brokers said the seemingly unending rally on energy markets is more a reflection of fears about unexpected supply disruptions at a time when demand is strong.

In its weekly petroleum supply report, the Energy Department said Wednesday domestic inventories of gasoline fell by 3.2 million barrels last week to 194.9 million barrels, or 7 percent below year ago levels.

US supplies of crude oil grew by 1.8 million barrels to 322.9 million barrels, or 13 percent above year ago levels, the report said. The supply of distillate fuel, which includes heating oil and diesel, increased by 1.4 million barrels to 132.5 million barrels,or 4 percent above last year's level.