- POSTED: 05 Oct 2013 04:36
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Oil prices rose on Friday on falling production in the Gulf of Mexico as companies evacuated staff ahead of Tropical Storm Karen.
NEW YORK: Oil prices rose on Friday on falling production in the Gulf of Mexico as companies evacuated staff ahead of Tropical Storm Karen.
The main US contract, West Texas Intermediate for delivery in November, closed at $103.84 a barrel on the New York Mercantile Exchange, up 53 cents from Thursday's closing level.
Brent North Sea crude for November, the European benchmark, gained 46 cents at $109.46 a barrel in London trade.
Karen churned toward the US Gulf Coast on Friday, with forecasters warning of weekend flooding and heavy rainfall in several states, including Louisiana and Florida.
"The market is definitely getting some support off the tropical storm going into the weekend," said Phil Flynn of The Price Futures Group.
The analyst pointed out that the storm was forecast to move over sensitive refining and production areas along the Gulf Coast.
"I don't think there is anybody who believes there will be any major damages. But we are seeing some shut-in as a precautionary thing that should tighten supply in the coming weeks," he said.
British oil giant BP, for example, said it had started evacuating non-essential workers Wednesday and was shutting down production in the deepwater of the Gulf of Mexico.
Meanwhile, traders kept an eye on the partial US government shutdown over a budget deadlock that began Tuesday. Democrats and Republicans remained far apart on agreeing a funding compromise that would allow the government to resume full operations.
"The shutdown decision should have a minimal effect upon energy other than perhaps a very modestly bullish influence predicated upon a weaker USD," said Jeffrey Dawkins of The FQ Group.
A weaker dollar tends to boost demand for dollar-priced oil, pushing up prices.
Elsewhere in the oil market, a US government agency predicted the United States could top Russia and Saudi Arabia as the world's largest single producer of petroleum and natural gas this year.
While the US was roughly even with Russia as the top producer in 2012 of the two hydrocarbon fuels combined, it still lagged the longtime leader Saudi Arabia as a petroleum producer.
But helped by the boom in hydraulic fracturing, or fracking, production from shale deposits, the US will surpass the Saudis in oil in 2013, making it the world leader in each fuel, the US Energy Information Administration said.