Commodities: Oil jump as full-blown tropical storm cuts through Gulf of Mexico

Lloyd Doyle
July 13, 2019

Oil prices fell on Thursday as OPEC forecast slower demand for its crude next year, with crude futures easing from their highest in more than a month after US producers cut about half of their output in the Gulf of Mexico ahead of what could be one of the first major storms of the Atlantic hurricane.

Disappointing U.S. crude inventories and the looming storm in the Gulf of Mexico which may disrupt oil production, among others, contributed to the upswing, experts noted.

Even reports of OPEC's decreased June production and the increased tensions between a British tanker and Iranian guard boats late yesterday failed to lift prices beyond yesterday's spike which saw WTI crude top $60 a barrel for the first time in almost two months.

U.S. crude oil inventories decreased during the week ending July 5, the U.S. Energy Information Administration said in a report on Wednesday.

Futures in Original York had been diminutive changed after settling above US$60 a barrel on Wednesday for the principle time since Might. A fourth weekly draw in American stockpiles and Federal Reserve Chairman Jerome Powell's signal the central bank is preparing to cut interest rates added to the bullishness. U.S. President Donald Trump vowed Wednesday to impose extra sanctions on Iran and accused it of violating the nuclear accord that he withdrew from closing year.

World oil consumption will grow in 2020 at the same rate as this year, close to 1.1 million barrels per day or 1.1 percent, the OPEC warned Thursday.

"Oil markets are being supported by factors peculiar to the summertime - hurricanes and high gasoline demand", said Satoru Yoshida, a commodities analyst at Rakuten Securities Tokyo.

The Gulf of Mexico is home to 17% of US crude oil output which stands at around 12 million barrels per day (bpd).

West Texas Intermediate indecent for August provide won 6 cents to US$60.49 a barrel on the Original York Mercantile Substitute as of 8:53 Original York. The contract closed at the highest level since May 22 on Wednesday.

Brent crude futures reversed early losses and were up 40 cents at $67.41 a barrel by 0852 GMT. Royal Dutch Shell Plc and BP have also evacuated workers. US crude stocks fell by 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, more than the 3.1-million-barrel draw analysts had expected. Production last week rose to 12.3 million barrels a day. Three Iranian vessels attempted to impede the passage of a British oil tanker in the Strait of Hormuz, a spokesman for the United Kingdom government said in a statement on Thursday.

Other reports by Iphone Fresh

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