Hurricane fears is pushing oil prices well above $70 per barrel; many companies began shutting down production in the Gulf of Mexico, as a storm brewing in the Caribbean Sea may turn into a powerful hurricane and create havoc along the U.S. Gulf Coast.
Firstly, Brent crude was up this Friday $1.22, or 1.7%, higher at $72.29 a barrel; while the U.S. West Texas Intermediate (WTI) crude futures climbed $1.36, or 2%, to $68.78 a barrel. According to Reuters, both benchmarks were on track for solid gains this week.
Secondly, Brent was on track for a rise of 11%, its biggest weekly jump since June 2020. While the WTI was headed for a weekly gain of more than 10%; also, the strongest since June 2020.
Thirdly, as we reported previously, companies like Chevron and Shell began evacuating their workers from platforms as the storm advanced; in fact, companies like BHP and BP said they had begun to stop production at offshore platforms, as the storm could become hurricane and hit the U.S. Gulf Coast this Sunday.
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Hurricane fears, OPEC+ rising output and Federal Reserve add pressure to oil
Moreover, as for oil prices performance, Edward Moya, senior market analyst at OANDA, said. “Energy traders are pushing crude prices higher in anticipation of disruptions in output in the Gulf of Mexico; and on growing expectations OPEC+ might resist raising output given the recent Delta variant impact over crude demand.”
Consequently, the prospect of U.S. Gulf supply outages helped turn the market around from losses on Thursday; which had been partly spurred by output returning at a Mexican oil platform following a fatal fire.
In addition, ANZ Research said in a note. “The market may have more immediate concerns, with a storm building in the Caribbean. It’s expected to become a powerful hurricane and potentially wreak havoc in the Gulf of Mexico and Texas early next week.”
Finally, the U.S. Federal Reserve pushed further oil prices, as it said that the Central Bank must get on with its stimulus tapering.
