Oil rises toward $104 on Gulf of Mexico storm
The price of crude rose to near $104 a barrel Friday as offshore oil rigs in the Gulf of Mexico braced for Tropical Storm Karen. Investors were also keeping a close watch on developments in Washington D.C., as the partial shutdown of the U.S. government entered a fourth day.
U.S. benchmark oil for November delivery rose 53 cents to close at $103.84 on the New York Mercantile Exchange. For the week oil rose 97 cents, snapping a three-week losing streak that knocked $7.66, or 7 percent, off the price of a barrel.
Several oil companies operating in the Gulf of Mexico, including Exxon, said they were taking precautionary measures, including the evacuation of non-essential personnel from offshore installations in the path of the tropical storm that could turn into a weak hurricane over the weekend.
The potential disruption comes amid the budget impasse in the U.S. Some 800,000 federal workers and scores of agencies were idled this week after a sharply divided U.S. Congress failed to agree on short-term funding for the government to pay its bills beyond Monday, when the fiscal year ended.
A prolonged halt to government activities would reduce demand for energy and result in lower prices of fuels such as gasoline. That would be a boon for U.S. drivers but also signal a weak economy.
Brent, the benchmark for international crudes, gained 46 cents to $109.46 on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline fell 3 cents to $2.61 per gallon.
— Natural gas rose 1 cents to $3.51 per 1,000 cubic feet.
— Heating oil was flat at $3.00 per gallon.
Pamela Sampson in Bangkok contributed to this report.