Oil Rises on Hurricane Concerns

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SINGAPORE (AP) -- Oil prices rose as traders monitored the pace and path of an Atlantic hurricane that could smash the oil and gas infrastructure in the Gulf of Mexico, though that appeared less likely Tuesday. Light, sweet crude for October delivery rose 10 cents from Friday's close to $74.14 a barrel in Asian electronic trading on the New York Mercantile Exchange, midafternoon in Singapore.

SINGAPORE (AP) -- Oil prices rose as traders monitored the pace and path of an Atlantic hurricane that could smash the oil and gas infrastructure in the Gulf of Mexico, though that appeared less likely Tuesday.


Light, sweet crude for October delivery rose 10 cents from Friday's close to $74.14 a barrel in Asian electronic trading on the New York Mercantile Exchange, midafternoon in Singapore.


Floor trade was closed Monday for the U.S. Labor Day holiday. Friday, the October Nymex crude contract added 68 cents to settle at $74.04 a barrel, a four-week high.


Hurricane Felix strengthened into a Category 5 monster storm early Tuesday, forecasters said, just as it prepares to make landfall near the Nicaragua-Honduras border.


Crude oil prices rose as much as 56 cents from Friday's close in electronic trading overnight as traders eyed the movement of the hurricane.


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"Market participants are keeping an eye on Hurricane Felix, but at this point it doesn't really look like it'll affect oil and gas facilities in the Gulf of Mexico, and also, it has weakened to a Category 4 storm," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.


Felix's top winds weakened slightly to 135 mph as it headed west, but forecasters warned that it could strengthen again before landfall along the Miskito Coast early Tuesday. From there, it was projected to rake northern Honduras, slam into southern Belize on Wednesday and then cut across northern Guatemala and southern Mexico.


"But the hurricane is a reminder to everybody that we're entering the peak hurricane season, so the crude oil futures market continues to face upward exposure," Shum said.


Late Monday, Felix remained a fearsome hurricane. It was centered 145 miles east-southeast of the Nicaragua-Honduras border, moving west at 20 mph. The U.S. Hurricane Center said Felix should make landfall before 11 a.m. EDT.


Oil prices have also been supported by U.S. government reports that consumer spending and factory orders rose in July. Energy investors pay close attention to economic data because an economy's strength is seen as a barometer of demand for oil and gasoline.


October Brent crude futures fell 9 cents to $73.32 a barrel on the ICE futures exchange in London.


Nymex heating oil futures rose 1.37 cents to $2.0711 a gallon (3.8 liters) Tuesday, while gasoline futures gained 0.86 cent to $1.9731 a gallon.


Natural gas futures dropped 13.8 cents to $5.33 per 1,000 cubic feet.