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NEW YORK -- Crude oil prices rose, approaching $60 a barrel in New York, as Tropical Storm Cindy in the Gulf of Mexico disrupted the arrival of shipments to the United States.
Bloomberg reports that the Louisiana Offshore Oil Port, the biggest U.S. oil import terminal, stopped unloading cargoes from tankers yesterday because of the approach of the storm. The storm was forecast to make landfall last night or early today, the National Hurricane Center said. Prices rose to a record last week on concern that surging fuel demand may outpace supply this year.
“Any storm in the Gulf of Mexico, especially this early in the season, makes us nervous,'' said Michael Fitzpatrick, vice president of risk management with Fimat USA in New York. “Memories are still fresh. It was storms last year that helped get us in the current situation.''
Crude oil for August delivery rose $1, or 1.7 percent, to $59.75 a barrel at 12:44 p.m. on the New York Mercantile Exchange yesterday. Futures touched $60.95 a barrel on June 27, the highest since trading began in 1983. Prices are up 51 percent from a year ago.
Hurricane Ivan in September damaged production platforms and pipelines in the Gulf. Ivan cut a total of 43.8 million barrels of oil production and 172.3 billion cubic feet of natural gas output, according to the Minerals Management Service in June. States along the Gulf receive more than half of U.S. oil imports and are home to 50 percent of the nation's refining capacity.
The Atlantic Ocean hurricane season was forecast to be more active than normal this year, with as many as five major hurricanes, officials at the National Oceanic and Atmospheric Administration said last month. The season lasts from June through November.
A tropical depression in the Caribbean Sea was upgraded to Tropical Storm Dennis this morning, the center said. It may develop into a hurricane by the end of the week. This is the earliest date on record for four named tropical storms to have formed in the Atlantic, according to the Miami-based center.
“I think Tropical Depression Four is the big concern,'' said Kyle Cooper, an analyst with Citigroup Inc. in Houston. “That has the potential to become a hurricane and cause real damage in the Gulf.''
“We've had a series of refinery glitches and now these storms are approaching,'' said Marshall Steeves, an analyst with Refco Inc. in New York. “Heating oil hit another record and it looks like the sky's the limit as far as the price is concerned. It's gotten to be an old story, a combination of strong diesel demand and tight stocks.''
Gasoline for August delivery rose 4.95 cents, or 3 percent, to $1.698 a gallon. Prices touched $1.715 a gallon, the highest since April 5. The fuel is 34 percent higher than a year ago.
Pump prices for regular-grade gasoline fell 0.3 cent to an average $2.223 a gallon yesterday, according to the American Automobile Association. Prices touched a record $2.276 a gallon on April 11 and are 17 percent higher than a year ago.