Storm triggers rise in world crude prices

BUDAPEST, Hungary -- Oil prices crept up to settle at a new high Thursday, taking their cue from a rally in gasoline futures contracts, but analysts said the momentum is somewhat bewildering given the easing of concerns about a storm expected to move into the Gulf of Mexico.\nTropical Storm Katrina trudged toward Florida's southeastern coast Thursday and forecasters expected it to strengthen to a weak hurricane before making landfall overnight. But the U.S. National Hurricane Center said after the storm moves into the Gulf of Mexico, it could turn to the north and eventually strike the state's Panhandle early next week -- a path that would keep it away from the heart of the oil and gas producing regions of the Gulf.\n"Today was a golden opportunity to sell off," said analyst Phil Flynn at Alaron Trading Corp. in Chicago. \n"One would think that with Katrina going off in a different direction, the market would too. But it didn't."\nOn Wednesday, fears that Katrina would disrupt oil and natural gas production in the region was the main catalyst pushing October crude futures on the New York Mercantile \nExchange to a record close of $67.32 a barrel.\n"The market really went bonkers about this storm, even more than usual," Flynn said. "That tells me this market is looking for excuses to drive higher."\nCrude futures gained 17 cents to settle at $67.49 on Thursday, the highest closing price since oil began trading on Nymex in 1983. \nOn an inflation-adjusted basis, oil prices would need to hit about $90 a barrel to match the highs of 25 years ago.\nCrude futures briefly touched $68 a barrel in overnight electronic trade, reflecting the market's long standing jitters about rising demand and the limited amount of excess production capacity around the world. \nStoking bullish sentiment was a U.S. supply report that showed a decline in gasoline inventories and China saying its crude imports spiked in July. \nTraders also eyed a refinery snag in California.\nStill, the fear of supply issues exceeds actual tightness in the market, traders said.