Oil prices rallied this evening as Hurricane Ida threatened to damage oil installations in the Gulf of Mexico despite being downgraded to a tropical storm.
US crude jumped $1.76 to $79.19 a barrel, with traders saying a weaker US dollar had also helped to lift prices. Brent North Sea crude gained $1.59 to $77.46.
Ida, which was downgraded to a category one storm earlier today, took aim at the US and oil fields in the Gulf of Mexico after causing flooding and landslides that killed 124 people in El Salvador.
Oil prices meanwhile rebounded after falling on Friday when a Labor Department report on US unemployment, seen as one of the best indicators of economic momentum, showed a rise in the jobless rate to the highest level since 1983.
The US is the world's biggest energy user and is seen as a crucial driver of oil demand, which has been depressed by the global economic slump.
Meanwhile top oil-producing countries fear that the UN climate change conference in Copenhagen next month could levy new taxes on the oil and gas industries, Algerian Energy Minister Chakib Khelil was quoted as saying on Sunday.
Khelil told the Algerian APS news agency that the Organisation of Petroleum Exporting Countries (OPEC), a 13-member cartel of oil-rich nations, are worried any new taxes agreed in the Danish capital could have 'a negative impact on their economies'.
