A satellite image of a depression in the Gulf of Mexico where wells account for a third of US oil
By David Litterick, in New York
Last Updated: 12:31am BST 16/08/2007
Oil prices jumped more than a dollar yesterday as the hurricane season began in earnest, with two tropical storms heading for deep-water oil platforms in the Gulf of Mexico.
Royal Dutch Shell said it was shutting down a well that produces 5m cubic feet of gas a day, and evacuating non-essential personnel from facilities on the Texas coast.
Other energy companies operating in the Gulf, which accounts for around a third of US domestic oil and gas production, said they were monitoring the situation.
Tropical storm Erin was named in the Caribbean and is expected to hit the coast of Texas later this week. It is not expected to grow to hurricane strength and damage is likely to be minimal.
However, oil traders were paying more attention to tropical storm Dean, which has formed in the mid-Atlantic and could enter the Gulf as a Category Three hurricane over the weekend.
The potential threat, coupled with a fall in US oil and gas inventories, sent US crude $1.35 higher to $73.63 a barrel in early trading on the New York Mercantile Exchange with similar gains seen for Brent crude in London.
Oil prices had been on the way down in recent days as oil cartel Opec warned that the reduced growth forecasts for the world economy as a result of the sub-prime lending crisis and ongoing credit crunch could hit oil consumption.