NEW YORK (AP) -- Crude oil on the futures market briefly sank below the $100 a barrel mark Friday for the first time in five months -- suggesting investors believe a worsening global economy will continue to drive down demand for some time in the United States and elsewhere.The last time crude traded below $100 a barrel was on April 2.
Light sweet crude for October delivery fell as low as $99.99 a barrel on the NYMEX floor. It is now trading around $100.20, down 67 cents from yesterday's settle price of $100.87.
Gasoline prices, however, jumped at the wholesale level as Hurricane Ike swept toward Houston, home to about one-fifth of U.S. refining capacity, and the site of a major fuel and grain distribution channel.
Wholesale gasoline prices on the Gulf Coast moved even further into uncharted territory to around $4.85 a gallon ($1.28 a liter), as refineries anticipated that Ike would incur at least a significant pause in their operations, and at worst severe damage to their facilities.
In London, October Brent crude rose 94 cents to $98.58 a barrel on the ICE Futures exchange, after closing at a six-month low in the previous trading session.
Gasoline prices also rose. October gasoline futures climbed 8.97 cents to $2.8385 a gallon on Nymex.
Exxon Mobil Corp., Valero Energy Corp., ConocoPhillips and Marathon Oil Co. have begun halting operations as the Category 2 hurricane headed straight for the nation's biggest complex of refineries and petrochemical plants. U.S. wholesale gasoline prices spiked 30 percent Thursday.
As of Thursday, about 97 percent of crude production and 93 percent of natural gas production in the Gulf were shuttered, according to the Department of the Interior's Minerals Management Service.On Friday, the storm was centered about 370 miles (595 kilometers) southeast of Galveston, Texas, moving to the west-northwest at 12 mph (19 kph). Top sustained winds were 100 mph (160 kph). Ike is huge, taking up nearly 40 percent of the Gulf of Mexico. The National Hurricane Center said tropical storm-force winds of at least 39 mph (62 kph) extended across more than 510 miles (820 kilometers).
Ike and last week's Hurricane Gustav have helped to stanch a sharp downturn in oil prices. Concerns over slowing economic growth on a global scale and a strengthening U.S. dollar have led funds to liquidate their commodities holdings, pushing crude prices down about 30 percent from their record $147.27 set on July 11.
And storms can dampen demand even more, by disrupting the local economy, power plants, and electrical distribution systems.
Amid a much slower U.S. economy that caused June fuel demand to fall more than 5 percent from the same period a year ago, many market watchers are expecting oil prices to resume their tumble.
"With demand being down as much as it is, the market, some argue, is a bit oversupplied," said Stephen Maloney, a senior consultant in energy risk management at Towers Perrin. "When you ask, how does Ike affect things? Its impacts are going to be in the context of lower demand for products than a year ago."
In other Nymex trading, October heating oil futures rose 4.25 cents to $2.9580 a gallon. Natural gas for October delivery rose 28.5 cents to $7.533 per 1,000 cubic fee
Light sweet crude for October delivery fell as low as $99.99 a barrel on the NYMEX floor. It is now trading around $100.20, down 67 cents from yesterday's settle price of $100.87.
Gasoline prices, however, jumped at the wholesale level as Hurricane Ike swept toward Houston, home to about one-fifth of U.S. refining capacity, and the site of a major fuel and grain distribution channel.
Wholesale gasoline prices on the Gulf Coast moved even further into uncharted territory to around $4.85 a gallon ($1.28 a liter), as refineries anticipated that Ike would incur at least a significant pause in their operations, and at worst severe damage to their facilities.
In London, October Brent crude rose 94 cents to $98.58 a barrel on the ICE Futures exchange, after closing at a six-month low in the previous trading session.
Gasoline prices also rose. October gasoline futures climbed 8.97 cents to $2.8385 a gallon on Nymex.
Exxon Mobil Corp., Valero Energy Corp., ConocoPhillips and Marathon Oil Co. have begun halting operations as the Category 2 hurricane headed straight for the nation's biggest complex of refineries and petrochemical plants. U.S. wholesale gasoline prices spiked 30 percent Thursday.
As of Thursday, about 97 percent of crude production and 93 percent of natural gas production in the Gulf were shuttered, according to the Department of the Interior's Minerals Management Service.On Friday, the storm was centered about 370 miles (595 kilometers) southeast of Galveston, Texas, moving to the west-northwest at 12 mph (19 kph). Top sustained winds were 100 mph (160 kph). Ike is huge, taking up nearly 40 percent of the Gulf of Mexico. The National Hurricane Center said tropical storm-force winds of at least 39 mph (62 kph) extended across more than 510 miles (820 kilometers).
Ike and last week's Hurricane Gustav have helped to stanch a sharp downturn in oil prices. Concerns over slowing economic growth on a global scale and a strengthening U.S. dollar have led funds to liquidate their commodities holdings, pushing crude prices down about 30 percent from their record $147.27 set on July 11.
And storms can dampen demand even more, by disrupting the local economy, power plants, and electrical distribution systems.
Amid a much slower U.S. economy that caused June fuel demand to fall more than 5 percent from the same period a year ago, many market watchers are expecting oil prices to resume their tumble.
"With demand being down as much as it is, the market, some argue, is a bit oversupplied," said Stephen Maloney, a senior consultant in energy risk management at Towers Perrin. "When you ask, how does Ike affect things? Its impacts are going to be in the context of lower demand for products than a year ago."
In other Nymex trading, October heating oil futures rose 4.25 cents to $2.9580 a gallon. Natural gas for October delivery rose 28.5 cents to $7.533 per 1,000 cubic fee
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