Gulf Of Mexico Storm System Sends Oil Prices Soaring

New Orleans, LA (AHN) – A weak storm system in the Gulf of Mexico expected to follow closely Hurricane Katrina’s path has caused problems in Florida, Louisiana and elsewhere in the United States. Fears of a weekend storm sent oil prices soaring to a record high of $84.10 in trading on Thursday before they fell back. In early trading on Friday, U.S. crude for November delivery was at $81.65 a barrel.

So far, it is only an area of low pressure in the Gulf of Mexico near Florida. But Louisiana’s governor declared a state of emergency late Thursday, issuing a call for parishes to evacuate residents from low-lying areas as a precaution. Oil companies followed up by evacuating vulnerable workers from oil rigs out in the Gulf.

That meant that energy firms shut down over 360,100 barrels per day (bpd) of oil output in the Gulf of Mexico, which represents over a quarter of the region’s crude production. Energy firms also shut down 16.7 percent of natural gas production there.

In central Florida, the storm system spawned a tornado late Thursday that damaged 50 homes. In southeast Louisiana, parishes were put on alert for rain, wind and coastal flooding and sent oil prices to record highs.

Forecasters say that the storm system could become a tropical storm, the Associated Press reports.

AHN