Oil Prices Jump $1 as Gustav Shuts Down Gulf Operations

Investors react to storm threat
By Jess Kilby,  Newser User
Posted Sep 1, 2008 4:35 AM CDT
An oil rig crew worker on the Chevron Genesis Oil Rig Platform in the Gulf of Mexico on Aug. 19. Oil prices settled above $118 a barrel Wednesday, as Huuricane Gustav spun toward the Gulf of Mexico.   (AP Photo/Mary Altaffer)
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(Newser) – Hurricane Gustav helped boost oil prices today by more than $1 a barrel as energy companies shut down production facilities in the storm's path, reports Reuters. US crude rose $1.54 to $117 per barrel this morning, after briefly surging to over $118 when NYMEX opened for electronic trading hours earlier than usual.

"The biggest danger is that the tidal flows knock refineries out of action at a time when oil product inventories are at a minimum," a London analyst told Bloomberg. More than 96% of American oil production in the Gulf and 82% of natural gas output were shut down by yesterday afternoon. The Gulf normally provides a quarter of all US oil production.