Oil rises for third day
Oil rose for a third day on Wednesday, boosted by the possibility that Tropical Storm Gustav could become the first major storm since 2005 to threaten Gulf of Mexico oil and gas installations.
Oil hovers at $102Crude for October delivery rose $1.42 to $117.69 a barrel by 12:48 p.m. British time, after settling up $1.16 on Tuesday. London Brent crude rose $1.14 to $115.77 a barrel.
Oil could head towards last week's near-three-week high of just above $122 a barrel in the next few days depending on the weather in the Gulf of Mexico, said Masaki Suematsu, analyst at broker Newedge in Tokyo.
"Gustav is headed right toward the centre of the Gulf of Mexico. Hurricanes taking this route are usually threatening," he said.
Gustav was downgraded to a tropical storm on Wednesday after it came ashore in Haiti, but forecasters expect wind speeds to regain hurricane force.
Most computer models used to predict hurricane paths showed Gustav headed towards Louisiana and Texas, where rigs produce a quarter of U.S. crude oil.
"Between now and the weekend, we could see crude prices encounter a fair measure of support, as the uncertain path of the storm generates the usual consternation," said Edward Meir of broker MF Global.
Three years ago, Hurricanes Katrina and Rita crippled production in the region.
U.S. dollar weakness, which has contributed to oil's record run this year, provided support to the market. The U.S. currency fell against the euro, after a six-month high the previous day.
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