Oil approaches US$79 a barrel as Europe woes offset supply threat


AP

SINGAPORE — Oil fell to near US$79 a barrel Monday in Asia as Europe’s economic woes offset a supply disruption from a storm that shut down about a quarter of crude output in the Gulf of Mexico.

Benchmark oil for August delivery was down 38 cents at US$79.38 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose US$1.56 to settle at US$79.76 in New York on Friday.

In London, Brent crude for August delivery was down 60 cents at US$90.38 per barrel on the ICE Futures exchange.

In other energy trading, heating oil was down 1.1 cents at US$2.52 per gallon while gasoline futures gained 0.3 cent at US$2.47 per gallon.

Tropical Storm Debby, with top sustained winds of about 60 mph (95 kph), is lashing Florida and Alabama with heavy rains and is expected to come ashore later this week over the Florida Panhandle. As of Sunday morning, 23 percent of oil and gas production in the Gulf region had been suspended, according to a government hurricane response team. Employees have been evacuated from 13 drilling rigs and 61 production platforms in the Gulf.

Crude has plunged from US$106 less than two months ago amid signs of slowing economic growth and oil demand in the U.S., Europe and China. Capital Economics said it expects Brent crude to fall to as low as US$70 during the next 18 months.