VIENNA, Austria, AP -Crude-oil futures jumped more than $1 a barrel Monday, driven up by concerns that a tropical storm in the Caribbean could grow into a hurricane and threaten Gulf of Mexico facilities.
Analysts said prices also received support from weekend unrest in Iran — OPEC”s second-largest producer of crude — and mixed signals on spare capacity from members of the Organization of Petroleum Exporting Countries.
Light, sweet crude for November delivery rose $1.62 to $64.25 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange.
December Brent futures on the International Petroleum Exchange in London rose $1.39 to $60.87 a barrel.
Products also jumped. Heating oil gained 5.45 cents to $2.0045 a gallon on the Nymex, while gasoline spiked by nearly eight cents to $1.8250. Natural gas rose 68 cents to $13.900 per 1,000 cubic feet.
Tropical Storm Wilma formed south of the Cayman Islands on Monday as the 21st named storm of the season, tying the 1933 record for the most storms in an Atlantic season, the National Hurricane Center in Miami said.
Forecasts show the storm heading into the Gulf of Mexico by Thursday or Friday. Experts said high water temperatures and other conditions meant it could become a significant hurricane.
Most U.S. oil production and refineries are in the central and western Gulf, and traders are nervous about yet more damage to oil facilities after hurricanes Katrina and Rita.
After surging above $70 a barrel in late August, oil prices have pulled back in recent weeks, although there are plenty of concerns about the pace of recovery following Rita, and whether supplies will be adequate going into the Northern Hemisphere winter, when demand for heating oil peaks.
"The market is on edge; it”s looking for directions. There”s a lot of volatility now, which is characteristic of a tight supply situation," said Victor Shum, energy analyst at Texas-based Purvin & Gertz in Singapore.
In Vienna, PVM Oil Associates suggested that fears of instability in Iran — where a weekend bomb attack killed five people and injured 80 — also acted to shore up the market. And "mixed signals from OPEC," with Algeria "assuring that the organization has enough spare capacity next year to bring down prices" even as Venezuelan President Hugo Chavez asserts the opposite, added to market volatility.
On Friday, the U.S. federal Minerals Management Service reported a slight uptick in Gulf of Mexico oil production, putting the amount of shut-in output at about 1 million barrels a day, or 67.3 percent of total daily output in the Gulf, down slightly form 68.8 percent seen Thursday.
There was virtually no improvement in natural gas output, with some 5.65 billion cubic feet a day of output off line, or 56.5 percent of the total in the Gulf, the minerals service said.