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Sunday oil trading to test Gustav reaction
08/31/2008

Sunday oil trading to test Gustav reaction

New York Mercantile Exchange to open early Sunday to allow oil futures traders to react to hurricane nearing key crude refineries in Louisiana.

NEW YORK -- The world oil market's reaction to the gathering threat of Hurricane Gustav will be tested in an extended trading session on Sunday afternoon.
 
The CME Group, which runs the New York Mercantile Exchange and Globex electronic trading system, called for trading to begin at 2:30 p.m. ET.
 
Normally, electronic trading on Sunday begins at 6 p.m. ET, coinciding with trading in Asia. Floor trading in New York will remain closed as scheduled on Sunday.
 
"We wanted to provide [traders] with the opportunity to respond to the storm's potential impact to energy markets as quickly as possible," said Bryan Durkin, chief operating officer of CME Group, which runs the NYMEX.
 
On Friday, U.S. crude for October delivery fell 13 cents to settle at $115.46 a barrel. Prices rose as high as $118.76 during the day as Gustav bore down on the Gulf, but then pulled back as the dollar gained strength against the 15-nation euro - a move that typically pulls oil prices lower.
 
Facilities in the Gulf account for about 25% of U.S. oil production. Offshore platforms and pipelines buried in the sea bed are vulnerable to extreme storms such as hurricanes.
 
Three years ago, Hurricanes Katrina and Rita devastated oil facilities before battering the Louisiana coast. The storms, which reached Category 5 strength before making landfall, destroyed 113 offshore oil and natural gas platforms and damaged 457 pipelines in 2005.
 
If the storm does make a direct hit on Gulf facilities, the Energy Department said Thursday it was prepared to release supplies from the government's 700 million barrel Strategic Petroleum Reserve to cushion the blow
 
 





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