Oil price update - Sept 3

(Getty Images)

Oil climbed further above $74 on Monday, within sight of its record high, as Opec kept a lid on oil output in the run-up to its September 11 ministerial meeting.

Market participants were keeping watch of a potentially catastrophic Category five storm in the Atlantic Ocean. Current projections show it avoiding offshore oil and gas fields.

US crude was up 31 cents at $74.35 by 0858 GMT. The US Labor Day holiday shut the New York trading floor but electronic trade continued as usual. London Brent crude was up 53 cents at $73.22.

Opec kept a lid on its oil production in August, a Reuters survey found, suggesting the exporter group is intent on retaining output restrictions at its September 11 meeting in Vienna.

Consumer nations have been calling for more oil as the price climbs back towards its August 1 record high of $78.77. Opec has repeatedly said shortfalls of refined products are not their problem and the world is amply supplied with crude.

The 10 Opec countries subject to output restrictions - all except Iraq and new member Angola - kept production little changed at 26.74 million barrels per day (bpd) in August, the Reuters survey showed.

Total Opec supply fell because of a drop in Iraqi exports.

Opec, source of more than a third of the world's oil, agreed last year to lower production by 1.2 million bpd from November 1 and by a further 500,000 bpd from February 1.

US Gulf of Mexico oil and natural gas producers were monitoring Hurricane Felix as it churned through the Caribbean Sea on Sunday, but none has reported reduced offshore production or evacuated workers to onshore locations.

Felix, which had top sustained winds of 270 kilometres per hour by 2400 GMT, was forecast to cross the southern Caribbean into the Yucatan peninsula and then through Mexican offshore production areas in the Bay of Campeche, the US National Hurricane Center said.

Oil and gas companies available on Sunday said decisions to begin evacuating workers who are not essential to production from offshore platforms would likely not be made before Tuesday. Evacuations would only begin if the storm turned to the north, targeting production areas off the US Gulf Coast.

Leading US refiner Valero Energy said on Sunday major process units at its 275,000 barrel-per-day (bpd) refinery were operating normally.

Still, analysts said worries about the hurricane halting production later this week were expected to keep investors wary and hold up prices.

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