Oil prices rose Monday in Asia to above $116 a barrel on expectations Hurricane Gustav will damage drilling and refining operations as it approaches the Louisiana coast.
Light, sweet crude for October delivery was up $1.04 at $116.50 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract slipped 13 cents on Friday to settle at $115.46 a barrel.
"There’s no question the drilling platforms in the Gulf of Mexico and the big refineries between Houston and New Orleans are in the path of this hurricane," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "There’s likely to be some damage. We could see an extended period of disruption."Forecasters said Gustav was moving faster than expected as it marched toward the coast with top sustained winds of around 115 mph. Early Monday, the National Hurricane Center said Gustav was a Category 3 storm centered about 175 miles southeast of the mouth of the Mississippi River and moving northwest near 17 mph.
About 1.9 million people have left the Louisiana coast region, the largest evacuation in state history, and thousands more had left from Mississippi, Alabama and flood-prone southeast Texas.
The average retail gasoline price in the U.S. was at $3.687 a gallon, auto club AAA reported Sunday. The price rose slightly more than a penny Saturday. U.S. gasoline prices peaked on July 17 at $4.114 a gallon.
The storm has already killed at least 94 people on its path through the Caribbean, and comes three years after Hurricane Katrina killed 1,600, mostly from flooding in New Orleans.