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Petrol Prices Rise Amid US Hurricane Threat

(c) Sky News 2012

Tropical storm Isaac's march towards the US Gulf coast is forcing oil costs higher, leaving petrol prices almost at the mercy of mother nature.

Disruption to oil production in the Gulf of Mexico has pushed wholesale petrol prices back towards levels not seen since April, up more than 4%, according to the latest figures.

It has left Americans paying an average $3.74 (£2.37) per gallon - equating to just over 52p a litre (which is incidentally 72% cheaper than the UK unleaded average of last week).

Panic buying in the southern states, which are seen as being at risk from Isaac , has also been a contributing factor. The storm was predicted to strengthen into a Category 2 hurricane.

There is the danger too of oil price rises, related to the tropical storm, adding to the UK's petrol price burden in the coming weeks.

Average UK petrol prices have climbed to 138.03p a litre, from a summer low of 130.81 on  July 1 and a record high of 142.48p on April 16.

An AA spokesman said: "I think the UK motorist is in for a bumpy ride to finish off the summer, but if refiners see a chance to make a handsome buck from current difficulties and speculation they will up production to take advantage.

"For the moment, the impact will be lessened while schools are out and summer weather reduces a car’s fuel consumption."

While Gulf of Mexico production has ground to a near halt because of the approaching storm, with companies including BP affected, lost output can be covered by the release of stocks from reserves which should limit price rises.

It is the threat of damage from the worst storm in four years that worries the market most.

London-traded Brent Crude was up slightly, near the $113 per barrel mark.

There is also pressure on that price after fire devastated the world's second biggest refinery in Venezuela - forcing the country to seek US supplies.

An explosion ripped through the Paraguana site on Saturday, leaving dozens dead and serious questions about its operational future.