Oil prices climbed above $43 today as energy companies operating in the Gulf of Mexico prepared for possible output disruptions due to Hurricane Ivan, and Iraq saw some of the bloodiest violence in weeks.
US light crude rose 67 cents to $43.48 a barrel, retracing one-third of Friday's $1.80 slump in New York as dealers took profits from an earlier rally.
Oil prices have swung widely in recent days and are almost $6 below the all-time peak at $49.40 struck on August 20th as dealers remain nervous over potential supply hiccups as producers pump almost at full tilt.
A 4 per cent rally in oil prices last Thursday was triggered by data showing that US crude stocks had fallen more than 6 per cent in the past two months to the lowest level since March.
The thin inventory cushion will heighten concerns over Hurricane Ivan, which is forecast to enter on Monday the Gulf of Mexico, home to about one-quarter of US oil and gas output.
Shell Oil Company said yesterday it had shut offshore production wells in the eastern Gulf of Mexico and was evacuating workers from the eastern and central gulf ahead of the hurricane's approach. It was not immediately clear how much output was affected by Shell's closure.
Other oil companies have evacuated non-essential workers in the area, but no other output appeared to be affected so far.
Dealers were also concerned that the upsurge in violence in Iraq over the weekend might impact the country's oil exports, which have suffered a series of disruptions this year due to sabotage on pipelines.
On Friday, oil officials said Iraqi exports were running normally at about 1.8 million barrels per day (bpd) from southern export terminals and at a reduced 200,000 bpd from the northern Kirkuk oilfields through the Turkish Mediterranean port Ceyhan.