Oil price up Monday as storms take aim at Gulf of Mexico


  • Energy
  • Monday, 24 Aug 2020

This RAMMB/NOAA satellite image obtained on August 23, 2020, shows Tropical Storm Laura moving over Haiti and the Dominican Republic in the Caribbean as a second tropical storm, named Marco(upperL) moves into the Gulf Coast at 13:40 UTC om August 23, 2020 - Haiti was hammered by heavy rain on August 23, 2020 from Tropical Storm Laura, as a second tropical storm, named Marco, was forecast to strengthen into a hurricane and hit the US state of Louisiana on August 24, 2020. The US National Hurricane Center said Storm Laura was "bringing torrential rainfall and life-threatening flooding" to Haiti, which shares Hispaniola island with the Dominican Republic.It added that Storm Marco in the central Gulf of Mexico was "forecast to become a hurricane later today and be at hurricane strength when it approaches the northern Gulf Coast on Monday." - AFP

SINGAPORE: Crude oil prices nudged higher on Monday as storms bore down on the Gulf of Mexico, shutting more than half the region's oil production, although gains were capped by ongoing concerns about demand from coronavirus lockdowns.

Hurricane Marco and Tropical Storm Laura tore through the Caribbean and Gulf of Mexico on Sunday, forcing energy companies to pull workers from offshore platforms and shut down oil production.

Oil producers had shut 58% of the Gulf's offshore oil production and 45% of natural gas production on Sunday. The region accounts for 17% of total U.S. oil production and 5% of U.S. natural gas output.

Brent crude oil futures added 8 cents, or 0.2%, to $44.43 a barrel by 0040 GMT while U.S. West Texas Intermediate crude was up 7 cents, or 0.2%, to $42.41 a barrel.

Both benchmark contracts fell about 1% on Friday on economic concerns and rising crude supply.

"Crude prices rose higher as double trouble in the Atlantic could lead to huge disruptions with oil operations in the Gulf of Mexico," said Edward Moya, senior market analyst at OANDA in New York.

"Oil's gains, however, are likely to be muted as virus uncertainty continues to weigh on the crude demand outlook."

The global death toll from the coronavirus surpassed 800,000 on Saturday, according to a Reuters tally, with the United States, Brazil and India leading the rise in fatalities.

Also supporting prices was a report by members of the Organization of the Petroleum Exporting Countries and other oil powers including Russia, that oil producing countries in the OPEC+ group that pumped above supply targets from May to July will need to slash output by over a million barrels per day for two months to compensate.

- Reuters
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