The price of oil rose to near $97 a barrel on Monday as Tropical Storm Isaac barreled across the Gulf of Mexico and toward the U.S. mainland, picking up strength and threatening oil and refining operations. An explosion at a refinery in Venezuela also pushed prices higher.
By early afternoon in Europe, benchmark crude for October delivery was up 79 cents to $96.94 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 12 cents to finish at $96.15 per barrel on the Nymex on Friday.
In London, Brent crude rose 54 cents to $114.13 on the ICE Futures exchange.
Oil analyst Stephen Schork said in an email commentary that he expects "much higher volatility this week" due to Tropical Storm Isaac, which weather forecasters said would pick up strength before striking as a Category 2 hurricane somewhere between New Orleans and the Florida Panhandle on Wednesday.
Schork worries that the storm will be a repeat of Hurricanes Katrina in 2005 and Gustav in 2008, damaging Gulf refineries and pipelines and disrupting oil tanker traffic.
As of Sunday, work had been suspended on rigs accounting for 24 percent of daily oil production in the U.S. portion of the Gulf and eight percent of daily natural gas production there, the federal Bureau of Safety and Environmental Enforcement said.
Another factor pushing up prices was an explosion and fire that shut down operations at the Amuay refinery in western Venezuela, said Victor Shum, energy analyst at consultancy Purvin & Gertz in Singapore.
Amuay is among the world's largest refineries and is part of the Paraguana Refinery Complex, which also includes the adjacent Cardon refinery. Together, the refineries process about 900,000 barrels of crude per day and 200,000 barrels of gasoline.
In other Nymex trading, gasoline futures advanced 7.77 cents to $2.9882 per gallon, while heating oil rose 4.04 cents to $3.1591 per gallon. Natural gas rose 5.2 cents to $2.754 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.