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Crude falls as Hurricane Isaac makes landfall on Gulf of Mexico coast

Published 08/28/2012, 08:39 PM
Updated 08/28/2012, 08:41 PM
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Investing.com - Crude oil futures fell in Asian trading Wednesday after Hurricane Isaac roared ashore on the Louisiana coast, an area rich in offshore oil rigs and refineries.

Isaac halted 93% percent of U.S. Gulf of Mexico oil production before coming ashore, though investors were relieved the system's storm surge won't be nearly as damaging as Hurricane Katrina of 2005, and normal oil operations will likely ensue after the storm chugs inland.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD95.97 a barrel on Wednesday, down 0.38%, off from a session high of USD96.17 and up from an earlier session low of USD95.89.

Oil prices rose earlier on supply fears, as markets were concerned the storm would damage oil rigs and refineries.

U.S. President Barack Obama earlier stressed to residents along the coast to adhere to warnings but made no hints as to whether the government would tap the Strategic Petroleum Reserve to counter any production snags that should arise from Isaac or for political reasons, as gasoline prices have been climbing.

However, a Group of Seven finance ministers said in a statement saying they were prepared to take action to make up for supply shortfalls caused by Isaac or elsewhere.

A recent explosion at Venezuela's massive Amuay refinery that killed an estimated 41 people also kept prices elevated, as firefighters continued to battle blazes earlier.

Meanwhile, growing hopes European policymakers will approve a plan to allow the European Central Bank to participate in a sovereign debt-buying program bolstered the commodity somewhat.

On the ICE Futures Exchange, Brent oil futures for October delivery were down 0.24% and trading at USD112.17 a barrel, up USD16.20 from its U.S. counterpart.











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