International oil prices surged past $70 a barrel for the first time as Hurricane Katrina hit the Gulf of Mexico, the heart of the U.S. oil and refinery operations. The Korea Composite Stock Price Index plummeted by more than 20 points, and other major Asian stock markets were also disturbed by the aftermath of skyrocketing oil prices.
On August 29, the price of West Texas Intermediate crude oil for October delivery hit a record high of $70.80 a barrel on the New York Mercantile Exchange in after-hour trading, as Hurricane Katrina is targeting the Gulf of Mexico where 30 percent of the U.S. crude oil consumption and 24 percent of natural gas are produced. The category 4 storm has forced oil producers to shut down offshore production in the region.
Dubai crude oil, Korea`s benchmark, traded on August 29 at a higher than last weekend price of $58.43 per barrel on the Singapore International Monetary Exchange. Experts anticipate the price will shortly surpass $60 a barrel.
Due to soaring oil prices, the Asian stock prices plunged.
The Korea Composite Stock Price Index dipped by 23.39, or 2.15 percent, closing at 1,063.16. Kosdaq fell below 500, closing at 492.66, down a staggering 19.51 or 3.80 percent.
Tokyo`s Nikkei share average fell 1.04 percent, or 129.65 yen, from last weekend. The Weighted Price Index of the Taiwan Stock Exchange also fell 87.11 points, or 1.42 percent, closing at 6,049.44 and the main indices of Singapore, Hong Kong, and Shanghai also dropped by around one percent each.