Oil watchfully trades in the midst of incoming tropical storm

Oil prices

Oil futures struggled to start in a positive note on early Friday. Investors immediately shifted their attention on the storm which could possibly hit the Gulf of Mexico. Mainland markets in China closed due to public holiday also weighed on the activities.

The movement of oil markets was somehow limited on the day because of traders keeping a closer look tropical storm Nate and China’s Golden Week holiday. The storm has been threatening the heart of the U.S. oil industry just weeks following the two hurricanes that battered the region last month, which almost destroyed oil processing and producing facilities.

One of United States’ main fuel handler in the gulf of Mexico the Louisiana Offshore Oil Port (LOOP) said on the day that it will remain suspending operations until the weather is clear. As of now, the tropical storm is off the coast of Nicaragua, on its way to the northwest region of the Gulf of Mexico. This part of the gulf has oil platforms that pump as much as 1.6 million barrels per day (bpd). According to datas from the government, approximately 17 percent of production in the United States are in that region.

Looking on oil futures, U.S. West Texas Intermediate (WTI) crude prices lost more than 6 cents to trade at $50.73 a barrel from the previous session. Meanwhile, global benchmark for oil prices Brent crude futures also shed 6 cents to settle at 56.94 a barrel.

The on-going expectations that output reductions from the Organization of the Petroleum Exporting Countries (OPEC) will be extended, or possibly deepened, has underpinned prices.

 

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