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Hurricane Ike pushes oil price higher

After a period during which many expected the oil price to slip below the vital $100 a barrel level it seems that a raft of hurricanes in the Gulf have ensured this does not happen in the short term. While hurricane Gustav did not cause as much damage as had been feared it did cause a number of offshore rigs to be closed down as a precaution. There are now growing concerns that hurricane Ike will finish off the job which Gustav started!

Thankfully the rise in the price of oil has been offset by the strength of the dollar and the price of oil now stands at $106.34 a barrel after recently hitting a five month low of $104.70. The cut back in the Gulf of Mexico has seen supplies in the area fall by nearly 80% while gas output is also down 64%. How long this freeze will remain in place will depend on the path of hurricane Ike over the next few days.

Unlike the last few months, when the price of oil literally shot through the roof, it seems that this rally may well be short lived but trying to guess the flight path of a hurricane and the damage it can do is a dangerous game in itself.

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