Holiday dictates oil movements in US as market readies for storm season
Oil prices went their separate ways on Monday as the October delivery for Brent North Sea crude soared by US 38 cents in London while New York's light sweet crude deliveries for the same month barrelled down by US 14 cents to $US74.46 per barrel.
Analysts said that the diverging pattern marked the culmination of the long 'driving season' for many in the United States, where motorists fill up their tanks more frequently from May to September as they embark on marathon journeys for the summer break.
SEB Commodities Research analyst Bjarne Schieldrop said that as Labor Day signalled the end of the traditional driving season in America, so was the period of high gasoline demands saw its last few heydays.
With that episode now effectively past the market radar, Mr Schieldrop said that attention should now be trained on the hurricane season now boiling over at the Atlantic as analysts brace for the impact of weather disturbances on energy production in the Gulf of Mexico, obviously still reeling from the effects of the BP oil spill earlier this year.
Mr Schieldrop said that the anticipated weather disruptions would last for another two months as he noted that a tropical depression currently threatens the oil rich gulf as weather forecasters had predicted that the system could eventually turn into a cyclone and directly hit the Gulf of Mexico.
Yet analysts seem to be more alarmed of a storm coming from China and other emerging economies as they predicted at its current pace of nine percent growth each year, the likelihood of unparalleled global oil demand could transpire by 2030.
HSBC chief economist Stephen King said that around the time, oil demand would have equalled the worldwide oil output at this time as he predicted that "over the next five to ten years, we'll see significantly higher oil prices and the China story is becoming more and more important."