Price of Oil Drops to Less Than $86 per Barrel as Hurricane Sandy Hits the East Coast of US

Oil prices decreased to under $86 per barrel yesterday as Hurricane Sandy hit the East Coast in the US. This area is densely populated and due to the chaos that the storm will bring, energy consumption was predicted to fall as businesses and organisations closed and transport services were shut down.

On the New York Mercantile Exchange, electronic trading put the price of a barrel of oil from $86.28 a barrel to $85.88 a barrel, a reduction of 40 cents. As crude oil prices fluctuate depending on market demand and supply, an external factor such as severe weather conditions can influence the price of crude oil. There are forecasts that Hurricane Sandy will cause flooding as well as power failures. Therefore, demand for oil as a source of fuel will fall which will lower the price of oil. There are a number of oil refineries that may be affected by Hurricane Sandy, but America has a good supply of oil in general.

The storm is expected to go through New York City which will have an enormous impact on residents, businesses and transport services. People have already been told to evacuate the city to avoid the devastation that the hurricane will bring. Airports in the city have also cancelled thousands of flights that had been scheduled for today. Trading floors at the New York Stock Exchange and the New York Mercantile Exchange were closed yesterday. Electronic trading was open but was shut earlier than usual.

Brent crude was priced at $109.27 a barrel yesterday, a decrease in price by 29 cents. The stock market performance in Asia and Europe were lower yesterday which may have attributed to the change in prices of oil. However, the price of heating oil in the futures market in New York increased by 1.52 cents to $3.0916 a gallon yesterday.

You can find the latest fuel prices, including heating oil prices, listed on the Find a Fuel Supplier website.