Oil prices headed up towards $45 a barrel on Wednesday as Hurricane Ivan shut 60 percent of crude output in the Gulf of Mexico and at least five refiners along the US coast planned to close as a precaution.
The suspension of crude exports from northern Iraq due to the sabotage of a pipeline and expectations US crude stocks would decline for a seventh straight week when official data is released later on Wednesday also helped boost prices.
US light crude climbed 40 cents to a high of $44.79 a barrel, the third day in a row that prices have risen as Ivan, one of the fiercest Atlantic storms on record, swept towards the Gulf of Mexico where 25 percent of US oil and gas is produced.
London's Brent crude rose 20 cents to $41.93 a barrel. Oil companies have shut just over 1 million barrels per day (bpd), or 61 percent, of offshore crude oil output. Gas production was also reduced as thousands of workers were evacuated from offshore platforms and rigs.
At least 985,000 bpd of refining capacity in Louisiana and Mississippi was also expected to shut as a precaution against the storm, the largest refinery being ChevronTexaco's 350,000-bpd plant in Pascagoula, Mississippi.
US oil prices have gained almost $2 this week due to the hurricane and the stoppage of some Iraqi exports as fears of supply hiccups have heightened after US government figures last on Thursday showed national crude stocks falling more than 6 percent in the past two months to the lowest level since March.
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