Azerbaijan News Service

Oil price rises from six week low

Rising tensions with Iran and a potential hurricane in the Gulf of Mexico have pushed oil prices up from six week lows.

Oil rose on Monday as Tropical Storm Dolly barreled into the Gulf of Mexico, stoking concerns of disruptions to U.S. offshore oil and gas production. Another reason is that the threat of new sanctions against Iran over its nuclear program might escalate tensions in the Middle East.

U.S. crude settled up $2.16 at $131.04 a barrel after concerns about U.S. demand knocked prices from record highs over $147 a barrel last week. London Brent crude rose $2.42 to settle at $132.61 a barrel.

The storm, with sustained winds of nearly 50 mph (85 kph), emerged from the Yucatan Peninsula over the warm waters of the Gulf of Mexico, and could reach hurricane strength on Tuesday.

The U.S. Energy Information Administration said on its current path, Dolly was likely to miss major oil producing areas but could threaten some coastal refineries later in the week.