MW: Oil futures rise on hurricane worries, dollar weakness
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Crude futures rose above $78 a barrel on Monday, as a hurricane headed towards the Gulf of Mexico, raising worries that it may disrupt production at oil and gas installations located there.
The dollar fell against most other major currencies, further raising the investment appeal of dollar-denominated commodities such as oil and gold.
Crude oil for December delivery gained $1.09, or 1.4%, to $78.52 a barrel in electronic trading on Globex.
It earlier soared to an intraday high of $78.95 a barrel.
Hurricane Ida weakened slightly and is now a Category 1 hurricane, with additional weakening forecast over the next 24 hours, the U.S. National Hurricane Center said in an advisory on Monday. Maximum sustained winds have decreased to near 90 miles per hour.
However, a hurricane warning remains in effect for the northern Gulf Coast. Ida is expected to move across the Gulf of Mexico on Monday and approach the northern Gulf Coast tonight or early Tuesday.
A "dangerous storm surge" will raise water levels by as much as four to six feet above ground level along the coast near and to the east of where the center of the hurricane makes landfall, the advisory said.
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Near the coast, the surge will be accompanied by "large and destructive waves," it said.
Crude prices got a boost from worries over Hurricane Ida, but analysts at Vienna-based JBC Energy GmbH wrote in a note to clients that "so far no large impact on oil prices is expected due to the very high volumes in storage on and offshore."
Dollar weakness also supported oil prices on Monday. The dollar index (DXY 75.02, -0.64, -0.85%) , which tracks the performance of the greenback against a basket of other major currencies, fell 0.9% to 75.158. See Currencies.
Oil futures fell nearly 3% on Friday after data showed the U.S. unemployment rate climbed to 10.2% in October, topping the 10% mark for the first time in 26 years.
Nonfarm payrolls dropped by 190,000 in October, bringing the total number of jobs lost in the recession to 7.3 million.
Despite Friday's decline, oil prices ended the week up 0.6%. They have climbed 76% this year.
Elsewhere on Globex, December gold futures extended their recent surge on Monday, climbing to an intraday high of $1,109.40 an ounce. See Metals Stocks.
