STORM FEARS HOLD OIL PRICES HIGH

Storm fears hold oil prices high

Oil prices remain strong amid ongoing worries about the development of a tropical storm in the Gulf of Mexico.

In London, Brent Crude hit a new high of $79.35-a-barrel, before finishing the day at $79.07, while US light crude ended down 16 cents to $81.62.

About 25% of production in the Gulf of Mexico has been shutdown, and traders fear a storm will mean more closures, leaving supplies thinly stretched.

The mounting supply fears come hard on the heels of data showing US oil stocks

fell more than expected last week.

Evacuation

According to official figures US crude stocks fell for the fourth week running by a higher-than-expected 3.8 million barrels last week.

"The concern is that what is currently only a tropical disturbance in the eastern gulf could develop into a tropical storm and companies have already started evacuating workers from the area," said Barclays Capital Analyst Kevin Norrish.

"Both Shell and BP have reported that they are evacuating and shutting in all of their gulf oil production."

Oil industry workers have already left five production platforms in the Gulf, and three drilling rigs have been evacuated.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7006010.stm