Oil prices up as Hurricane Rita pounds the already battered Gulf of Mexico - Forbes.com

Oil prices up as Hurricane Rita pounds the already battered Gulf of Mexico - Forbes.com: "LONDON (AFX) - Oil prices were higher in midday trade on jitters over Hurricane Rita, which is now pounding the already battered Gulf of Mexico, where about a quarter of US oil operations are based.

The storm is moving towards the Texas coastline where it is expected to make landfall over the weekend. The US Hurricane Centre has said Rita should strengthen to a Category Four hurricane sometime later today.

At 11.57 am November-dated Brent futures contracts were up 107 cents at 65.23 usd a barrel while US benchmark November-dated contracts were up 120 cents at 67.40 usd.

'Today's (weekly US stocks) data is a bit of a sideshow... The big threat is the potential for further damage to the US refining system,' said Kevin Norrish, oil analyst at Barclays Capital.

'Crude is not the problem, if there were to be a significant loss of crude we'd see further release by governments.

'The threat is the impact on refining, and the potential is for gasoline and heating oil to move sharply higher if there is significant damage done,' he said. "