| GEO Business|
| Oil up as Gustav threatens Gulf refineries|
| Updated at: 0118 PST, Saturday, August 30, 2008|
NEW YORK: Oil prices rebounded Friday as worries mounted that Tropical Storm Gustav could grow into a dangerous hurricane before entering the Gulf of Mexico area, home to a quarter of U.S. crude supplies and 40 percent of refining capacity.
The storm was spinning off Jamaica's southwest coast on a course toward Gulf Coast states including Louisiana three years to the day since Hurricane Katrina slammed into the state and tore up oilrigs and refineries.
Light, sweet crude for October delivery rose 88 cents to $116.47a barrel on the New York Mercantile Exchange, after earlier rising as high as $118.76. On Thursday, prices swung wildly before ending the day $2.56 lower at $115.59 a barrel, the first time this week it closed lower.
In London, October Brent crude gained 72 cents to $114.89 a barrel.
As Gustav advanced, oil companies were pulling employees off installations. Royal Dutch Shell PLC has evacuated nearly 670 workers.
The company said production would be affected. BP PLC was also removing personnel from the region, while Exxon Mobil said it was bracing its structures for heavy wind and rain.
Trans Ocean Inc., the world's largest offshore drilling contractor, said Thursday it had evacuated about 190 workers from five of its 11 offshore drilling rigs in the Gulf. Trans Ocean has 1,550 workers in the region.
Worries about another monster storm have sent wholesale gasoline prices shooting up in the Gulf region, forcing filling stations to pass on the costs by raising pump prices ahead of Labor Day weekend.
“The market is conjuring up images of a replay of three years ago when Katrina wreaked havoc on the refinery system in the Gulf, so we're seeing a little spike from that,'' said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois.
Analysts attributed the volatility to doubts over whether Gustav will affect offshore energy production.