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The Independent (UK): Oil price soars on fresh hurricane fears: “The oil giants Shell, BP and Chevron began evacuating workers from the Gulf as Tropical Storm Rita tore through the Bahamas on its way to Florida.”: Tuesday 20 Sept 2005

 

By Philip Thornton Economics Correspondent

Published: 20 September 2005

 

Oil prices surged by more than $4 a barrel yesterday as a fresh storm bore down on the Gulf of Mexico and Opec drew back from opening the taps on crude production.

 

The oil giants Shell, BP and Chevron began evacuating workers from the Gulf as Tropical Storm Rita tore through the Bahamas on its way to Florida.

 

The latest weather crisis comes a month after Hurricane Katrina destroyed swathes of oil platforms and refinery complexes along the southern coast of the US. In New York, light crude record its biggest one day jump ever, to end up $4.39 to $67.39 a barrel. In London Brent crude settled up $3.80 at $65.61 a barrel.

 

The storm was forecast to enter the Gulf of Mexico early tomorrow and could strengthen to a hurricane within the next 24 hours, the US National Hurricane Centre said.

 

At its regular meeting in Vienna ministers from the 11 members of Opec, the oil producers' cartel, appeared set to reject calls for an immediate increase in supply. Over the weekend there had been hints it might agree to abandon its quota system and instead pump its maximum output until prices reverted to normal.

 

There was a second proposal - in line with a demand from Gordon Brown - to order a one-off rise of 500,000 barrels a day. Instead it was understood last night Opec had agreed to make available its remaining spare production, but only when needed in a world market short of refined product, rather than crude.

 

The Nigerian oil minister, Edmund Daukoru, said: "We will collectively make a pledge to have the spare capacity available if needed, but I don't believe that it is needed."

 

Sheikh Ahmad al-Fahd al-Sabah, the president of the cartel, said Opec was likely to agree a resolution today to release its spare 2 million barrels a day, if required.

 

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