Commodity Daily News

Storm Turns Out To Be A Double-Edged Sword For Oil Prices.

Fuel prices finished an erratic trading session on Thursday with lower prices, as commodities traders kept a close watch on the weather near the Gulf of Mexico. Sweet Crude for October delivery fell $2.56 to settle at $115.59/barrel on the New York Mercantile Exchange, after rising to as high as $120.50.


Apparently, storm factor turns out to be a double-edged sword for Oil prices. During this week, energy prices saw an initial rise and popped even higher on Thursday, but then reversed course. Oil has been volatile this week mainly due to the course of Tropical Storm Gustav and its approach toward the Oil-rich Gulf of Mexico. Though traders are concerned about the storm disrupting US Oil facilities in the area, many are also betting that if the storm strikes the Gulf Coast, fuel demand will drop and the government will release some of its Oil in reserve.

Few analysts are ruling out the possibility of another spike in Oil prices if Tropical Storm Gustav ends up slamming into the Gulf Coast.