NEW YORK – U.S. crude oil futures soared more than $2 on Tuesday as the fifth named storm already this season formed in the Atlantic Ocean only days after Hurricane Dennis (search) passed through the Gulf of Mexico.
Light, sweet crude for August delivery was up $2.23 at $61.15 a barrel on the New York Mercantile Exchange (search). Prices were up for the first time since August crude hit a record $62.10 on Thursday.
NYMEX August gasoline was up 4.59 cents at $1.778 a gallon. Support was seen at $1.70 with resistance at $1.765. August heating oil jumped 6.32 cents to $1.745 per gallon. Support was put at $1.66 with resistance at $1.70.
In London, August Brent crude gained $1.86 to $59.30 a barrel on the International Petroleum Exchange.
Tropical Storm Emily (search) was strengthening in the Atlantic Ocean on Tuesday and the storm had the potential to become a hurricane before it reaches the Windward Islands within the next 36 hours, the U.S. National Hurricane Center in Miami said.
This was the earliest date on record for the formation of five named storms, according to the NHC.
Hurricane Dennis forced the cumulative shut-in of 4 million barrels of oil and more than 18 billion cubic feet of gas last week, the U.S. Mineral Management Service said.
A preliminary Reuters survey of analysts predicted the disruption, along with previous minor disruptions caused by Tropical Storm Cindy, would be reflected in U.S. petroleum storage data for release on Wednesday. The survey forecast crude inventories fell by 3.2 million barrels last week.
They predicted a 2.2 million-barrel build in distillate stocks, the eighth increase in as many weeks, and an 800,000-barrel fall in gasoline stockpiles.
"Despite the storms, we think (refinery) runs will remain strong through July and then taper off somewhat as it becomes clear that product demand has been adequately provided for," said Tim Evans, analyst at IFR Energy Services. "U.S. stocks will likely trend lower over this period."
Last week's leap in prices to record levels prompted the Organization of Petroleum Exporting Countries to say it would restart talks on lifting output limits, but that it needed to be sure demand justified any rise.
An economic think-tank forecast China's economic expansion would slow to 8.6 percent in the third quarter and to 8.2 percent in the final three months of the year.
Full-year growth was seen at 8.8 percent, significantly lower than the 9.5 percent seen last year and in 2003, the China Securities Journal reported.