Oil up in Asia on Gulf of Mexico supply disruption

Singapore – Crude prices rose in Asia on Monday as the onset of Tropical Storm Debby forced oil and gas operators in the Gulf of Mexico to evacuate some platforms and rigs, analysts said.

New York’s main contract, light sweet crude for delivery in August, gained 30 cents to $80.06 a barrel and Brent North Sea crude for August delivery rose a cent to $90.99.

A crude supply disruption in the Gulf of Mexico region was propping up prices, said Ker Chung Yang, commodity analyst for Phillip Futures in Singapore.

“Over the weekend we see that the Gulf of Mexico has been affected by the storm and production has been disrupted,” he told AFP.

“They shut the rigs in the Gulf of Mexico, so I think this is one of the key reasons that are supporting the oil prices at the moment.”

Oil rigs extract petroleum in Culver City, California. AFP FILE PHOTO

The latest update on Debby issued by the US Bureau of Safety and Environmental Enforcement (BSEE) on Sunday said that personnel had been evacuated from 61 of the 596 manned production platforms.

Crews on 13 out of the 70 rigs currently operating in the Gulf had also been evacuated, the BSEE update showed.

It estimated that “approximately 22.7 percent of the current daily oil production in the Gulf of Mexico has been shut-in.”

Oil production in the Gulf of Mexico constitutes 20 percent of US output, and any disruption in the area would have ramifications on crude prices as the US is the world’s largest oil consumer.