Oil rose for a fourth straight day Thursday as Tropical Storm Gustav prepared to enter the Gulf of Mexico causing oil / natural gas companies to evaluate oil rigs in the area.Oil rose above $120 a barrel earlier Thursday morning, but is now trading below that level. Oil has risen about $10 in a week on hurricane concerns and geopolitical tensions.
The other, major energy commodities also jumped Thursday morning on news of storm's likely track. Unleaded gasoline rose 6 cents to $3.12 per gallon, heating oil increased about 6 cents to $3.32 per gallon, and natural gas climbed 8 cents to $8.69 per million BTUs.
As of 8 a.m. EDT, Gustav was located about 70 miles east of Jamaica at 17.8N Latitude and 75.6W Longitude, moving west/southwest at 6 mph, with top wind speeds of 70 miles per hour, according to weather.com. Forecasters expect Gustav to track west/northwest, enter the Gulf of Mexico, strengthen to hurricane status, and strike the U.S mainland between Houston and the Florida Panhandle, with the most likely landfall being Louisiana.
Energy Trader Jim Dietz, who currently has no open trading positions, told BloggingStocks Thursday he's hoping Gustav "turns to where it can do the least damage or drifts out to sea," but a Louisiana-region strike would, in addition to threatening lives, homes and businesses, likely damage offshore / shoreline oil / natural gas installations in the area.
"Oil prices could spike $10-15 higher and there could be some gasoline shortages in the southeast U.S., but the main concern obviously is human life," Dietz said. "Let's hope officials can evacuate everyone to safety this time, well before the storm hits. Gustav could become a large and very dangerous hurricane."
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