Storm worries push oil prices up

Hurricane Ivan is also having an impact on oil prices

Oil prices hit their highest level in more than three weeks on Friday amid worries that the US hurricane season would continue to hamper supplies.

US light crude rose $1.71, to $45.59 a barrel, while London's Brent crude was up $1.70 to $42.45.

Hurricane Ivan only caused minor damage to facilities but 73% of US Gulf Coast production remained shut.

Traders were worried further storms may delay imports and stock-building ahead of the winter.

Analysts said oil and natural gas stocks in the coming weeks would be affected.

"We expect this outage to affect oil and natural gas inventory builds," the investment bank Merrill Lynch said.

"The loss of production over this period coupled with the disruption to imports offloading in the Gulf of Mexico being the key factors."

US crude inventories, which are at six month low, were likely to have fallen again in the wake of the disruption, dealers added.

Records

In August, the price of US light crude almost reached $50, with the price breaking records on a daily basis.

Worries about Iraqi supplies in the face of sabotage, as well as uncertainty caused by a recall referendum for President Hugo Chavez of key producer Venezuela, had conspired with predictions of high demand to push oil prices higher.

These fears also opened up opportunities for speculative dealing, which oil producers' cartel Opec suggest has added $7 to the price in recent months.

On Wednesday, Opec agreed to raise its production quota by one million barrels a day.

It said that world oil stockpiles were expected to grow by more than one million barrels per day this year, despite growing demand.