Oil prices drop as storm hits US

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Photo: Filomena Scalise

New York - Oil prices dropped on Monday as refineries and oil terminals on the US East Coast shut down due to Hurricane Sandy, which bore down on the heavily industrial New Jersey coastline.

New York's main contract, WTI light sweet crude for delivery in December, shed 74 cents from Friday's price to $85.54 a barrel.

In London, Brent North Sea crude for December fell 11 cents to $109.44 a barrel in London morning deals.

The New York Mercantile Exchange, where the WTI contract is traded, remained open despite the closure of equity and bond markets, but activity was light as traders stayed home due to the evacuation of numerous flood-threatened neighbourhoods in New York City.

“Oil has fallen and the market is reacting to Hurricane Sandy,” said Purvin and Gertz energy consultant Victor Shum.

“Quite a few refineries on the East Coast have reduced throughput in preparation for the hurricane to hit the US East Coast and that means crude oil consumption is going to come down,” the Singapore-based analyst told AFP.

Roads were mostly empty as businesses, government offices and public facilities such as schools were closed down on the heavily populated stretch from Washington to New York.

Most closures were to continue through Tuesday. - Sapa-AFP