Oil falls below $120 as Edouard spares U.S. Gulf

Reuters
Tuesday, August 5, 2008

NEW YORK (Reuters) – Oil fell below $120 on Tuesday to touch a three-month low as Tropical Storm Edouard hit the Texas coast without causing any major disruptions to U.S. energy operations.

U.S. crude traded down $1.94 to $119.47 a barrel by 1:36 p.m. EDT (6.35 p.m. British time) after tumbling to $118.00 earlier, the lowest price since May 5. London Brent crude lost $2.54 to $118.14 a barrel.

Edouard, the fifth tropical storm of the 2008 Atlantic hurricane season, came ashore at the McFaddin National Wildlife Refuge, a stop-over point for migrating birds like snow geese halfway between High Island and Sabine Pass.

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The storm caused only minor oil and natural gas outages as it passed through the U.S. Gulf of Mexico, and companies began to fly evacuated staff back to rigs.

“Crude and products futures are sharply lower … as Tropical Storm Edouard is projected to do little damage,” Addison Armstrong, analyst at Tradition Energy, wrote in a research note.

• A d v e r t i s e m e n t

The Louisiana Offshore Oil Port, the nation’s only deepwater oil port, said it was resuming offshore operations and expected to offload its first tanker in over 24 hours by early Tuesday afternoon.

The U.S. Gulf of Mexico supplies about a quarter of the country’s crude oil output and 15 percent of its natural gas. Gulf Coast refiners make about a quarter of domestic gasoline.

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