Hurricane Florence sparks FOUR-YEAR oil price high as storm prompts shortage fears

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By JOE GAMP

HURRICANE Florence has seen oil prices rise to a four year high sparking fears of a global shortfall in supply.

Oil prices broke the $80 a barrel barrier yesterday as the storm, along with Donald Trump’s sanctions on Iran, bumped prices.

It is the first-time prices soared as high since 2014, when freezing winter weather across the US drove up the demand for oil.

Hurricane Florence is expected to make landfall today with wind speeds up to 110mph as it barrells towards the US east coast.

The storm could also affect the Colonial Pipeline, which transports oil through North and South Carolina with the latter said to be in the direct path of the storm’s eye.

Hurricane Florence latest: Storms Florence and Isaac could further effect US oil production (Image: GETTY)

The pipe, which also sends crude oil to the north-east of the US, could be subject to flooding or power outages if the hurricane hits pumping station.

In anticipation of the storm and following advisories from the National Hurricane Center (NHC) and the Federal Emergency Management Agency (FEMA), residents along the eastern seaboard have been queuing up at filling stations to stock up on fuel.

People also stripped grocery stores bare and began to shutter up property as the storm moved closer to making landfall.

Meanwhile, Storm Isaac, a second hurricane hurtling across the mid-Atlantic, could pose an even bigger threat to oil supplies if it makes landfall on the Gulf of Mexico – a main hub for US refinery and production.

A graph showing rainfall potential for the United States when the tropical cyclone threatens land

A graph showing rainfall potential for the United States when the tropical cyclone threatens land (Image: NWS/NCEP/WPC)

Helima Croft, RBC Capital Markets’ global head of commodity strategy, confirmed the threat of multiple hurricanes could affect the supply chain, as well as Mr Trump’s crippling export sanctions on Iran, prompting foreign investors to look elsewhere to set up refineries.

Asian consumers of oil have begun to reduce purchases of Iranian oil and South Korea has reduced its imports Iranian crude to zero, on direct orders of the White House.

She said: “The hurricane story is transitory but the oil market us particularly sensitive to such events as we have a pretty tight supply situation looming.

“The Iran story is the dominant factor for prices.”

Iran is one of the world’s largest exporters of oil and the Trump administration’s suffocating restrictions could affect the world’s supply of the commodity.

Storm Florence has been classed as a dangerous

Storm Florence has been classed as a dangerous “major hurricane” (Image: AFP/GETTY)

The price of crude, market analysts warned earlier this month, could shoot up by 30 percent to a huge $95 (£74) dollars a barrel.

Following crippling sanctions on Iran following the collapse of the Washington and Tehran’s nuclear deal, the price of a barrel of US crude oil could result in a price rise of $4 (£3.12) a gallon of unleaded fuel at petrol station pumps.

First published on https://www.express.co.uk

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