Hooray! Oil Prices Fall As Hurricane Gustav Weakens
Posted by Your Energy Saver Evangelist
Today, we can heave a deep sigh of relief. The worse has not happened.
Oil prices actually fell today. New York’s main contract, light sweet crude for delivery in October, eased downwards 76 cents to 114.64 dollars per barrel. London’s Brent North Sea crude for October dropped 83 cents to 113.22 dollars.
US officials had earlier said yesterday that more than 96 percent of oil production and 82 percent of natural gas output in the Gulf of Mexico had been stopped in the face of Gustav. The Gulf of Mexico supplies about one quarter of US oil production
With the impact from Hurricane Gustav not expected to be as devastating Hurricane Katrina on oil installations, we can enjoy a brief respite from the upward escalation of oil prices.
This cheer is likely going to be tempered by upcoming news from next week’s meeting of the Organisation of Petroleum Exporting Countries. Early indications are that there is not going to be a change in current output quotas.
More worrying are the prospects of a reduction in output quotas, should oil prices continue their downward slide. This quota reduction would inevitably lead to a knee-jerk reaction - an upward spike in oil prices, further compounding your misery as a gas-dependent consumer.
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