Hurricane fears raise oil prices

There are fears that Tropical Storm Gustav is gathering strength

Oil prices have risen for a fourth straight day on fears that Tropical Storm Gustav may disrupt US production in the Gulf of Mexico.

With Gustav now heading towards Jamaica after battering Haiti on Wednesday, US light crude was up 74 cents to $118.89 a barrel in Thursday trading.

Gustav is on course to hit the US coast by Monday, and there are fears it may be strengthening into a hurricane.

London's Brent crude was up 71 cents to $116.93 a barrel.

Inflicting damage

With 85% of US offshore oil and gas production at risk of being affected, analysts predict that oil prices will rise further until Gustav has run its course.

UK oil giant Shell has already started to remove staff from its offshore facilities in the Gulf of Mexico.

"It looks as though the hurricane is on track to inflicting damage," said Ken Hasegawa, an analyst at broker Newedge in Tokyo.

Fellow oil analyst, Peter McGuire of Commodities Warrants Australia, predicted that the impact of Gustav could lead to oil prices returning above $130 a barrel, a price last seen in July.