New York crude approaches $90 in Asia

SINGAPORE – Hurricane fears steered crude prices towards $90 in Asian trade Thursday as stockpiles were forecast to fall due to a shutdown of oil production facilities in the Gulf of Mexico, analysts said.

New York’s main contract, light sweet crude for October delivery, added 41 cents to $89.75 per barrel.

Brent North Sea crude for delivery in October, gained 18 cents to $115.98.

Refinery shutdowns in the Gulf of Mexico as Tropical Storm Lee threatened the US east coast was boosting crude prices, said Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at Ernst & Young in Singapore.

“The US stockpile decline and impact on supplies in lieu of a storm building in the Gulf of Mexico brought some level of gain in the crude price,” he said in a report.

About 37 percent of oil production in the Gulf of Mexico – a key oil-producing region for the United States – was shut down on Wednesday due to Tropical Storm Lee, the US Department of the Interior said.

Traders were also eyeing weather conditions off the US and Mexican coasts for other storms that could become hurricanes.

Hurricanes tend to jack up crude oil prices in the short term as offshore drilling rigs and refineries are forced to close and may be damaged in their wake, creating a supply disruption.

Data released by the American Petroleum Institute was also encouraging crude traders as it predicted a three million barrel fall in US inventories last week, more than analyst expectations of a 1.9 million barrel drop.