Oil prices shot higher on global markets Tuesday after forecasts of a potentially devastating Atlantic hurricane season prompted renewed fears of damage to US Gulf Coast petroleum installations.
New York's main contract, light sweet crude for delivery in July, rallied 1.80 dollars to close at 71.76 dollars per barrel.
In London, Brent North Sea crude for July delivery advanced 1.65 dollars to 71.00 dollars per barrel in closing trade.
Futures prices moved higher "as the US government predicted another active Atlantic hurricane season," according to analysts at the Sucden brokerage firm in London.
"We're simply injecting some storm premium into the market instead of geopolitical risk premium and we pushed higher enough to touch off some chart points and that brought in some fresh speculative buying into the end of the complex," said analyst Jim Ritterbusch of Ritterbusch and Associates.
New York crude had fallen as low as 67.42 dollars on Monday, last seen April 7, mirroring losses across all major commodity markets.
Crude prices halted their decline late Monday after US weather experts predicted as many as 10 Atlantic hurricanes in upcoming months, four of which could hit the United States.
This year's hurricane season — starting in June and ending in November — would be "very active," but less severe than in 2005, according to a report issued by the Miami-based National Hurricane Center (NHC).
The NHC said that it anticipated 13-16 tropical storms — of which between 8-10 could transform into hurricanes.
And between 4-6 of those were forecast, in turn, to strengthen to major hurricanes.
Monday's announcement roiled the global crude market because more than 20 percent of oil production facilities in the rig-heavy Gulf of Mexico region were knocked offline by the devastating 2005 hurricane season — the most active on record — which pushed crude futures to then-historic highs.
Hurricane Katrina, which devastated the city of New Orleans on August 29, 2005, was the costliest US hurricane on record. It was followed by Rita in September and Wilma in October.
"When the hurricane season starts, the US buyers will start to buy more and this could send prices above 90 dollars," said Tetsu Emori, a Tokyo-based commodities strategist with Mitsui Bussan Futures.
Aside from the US hurricane report, market participants continued to fret over simmering geopolitical tensions in major crude producers Iran and Nigeria.
They were also gearing up for Wednesday's weekly snapshot of US energy stockpiles, with all eyes on gasoline, or petrol, reserves ahead of the peak-demand US driving season which starts late May.
