Business, Economics and Jobs

Isaac pushes oil prices higher


A controlled flame burns behind a storage tank in the oil refinery complex of Amuay-Cardon in Paraguana, located about 350 miles West of Caracas, Venezuela. Amuay-Cardon, one of the world's largest oil refineries, suffered an explosion that killed at least 26 people Saturday.


Kimberly White

The Republican National Convention might be spared from Tropical Storm Isaac, but dozens of Gulf coast oil refineries may not be as lucky. 

According to CNN Money, the US Bureau of Safety and Environmental Enforcement, which oversees offshore oil production, said that as of Sunday nearly 25 percent of the current daily oil production in the Gulf of Mexico has been shut down, adding, "nearly 50 rigs and oil platforms [were] already evacuated in advance of the storm. In addition, more than 8 percent of natural gas production in the Gulf has also been halted."

This translates to a loss of about 333,800 barrels of oil a day, according to the Financial Times. 

According to AAA, the US national average for a gallon of gasoline hit $3.75 on Monday and could rise even further if oil rigs do not reopen quickly following the storm. 

In an email to the Associated Press, oil analyst Stephen Schork said he expects "much higher volatility this week," adding that he fears the storm will be a "repeat of Hurricane Katrina."

Isaac isn't the only thing negatively affecting oil prices. 

Over the weekend GlobalPost reported on a refinery blast in Venezuela that killed at least 39 people. 

The blast at the Amuay plant, one of the world's largest, has also halted production for at least two days and damaged the surrounding houses, according to BBC News. The fire has since been brought under control.

"The gas cloud exploded, igniting at least two storage tanks and other facilities at the refinery," Energy Minister Rafael Ramirez told state TV, as quoted by the BBC. "It was a significant explosion, there is appreciable damage to infrastructure and to houses opposite the refinery."  

The Financial Times noted that officials in Caracas said the refinery could restart this week.