Friday, prices of oil edges higher as the Hurricane Harvey heads towards the Gulf of Mexico, in which United States petroleum industry are now preparing for possible supply disturbances. Brent crude futures, the international benchmark were up by 0.7% or 35 cents and traded at $52.39 a barrel.
The United States West Texas Intermediate crude futures were up by 31 cents or 0.7% and traded at $47.74 per barrel by 0320 GMT. Prices of oil was boosted as production in the affected area was ceased and shut down in preparation for the hurricane’s intensity, as well as on outlooks that the shutdown could last a bit longer if the hurricane causes extensive damage.
In accordance to this, Jeffrey Halley, senior market analyst at futures brokerage OANDA said that damage and flooding to refineries as well as shale fields, interrupted production in the Gulf of Mexico and infrastructure damage are unlikely to be bearish for the United States West Texas Intermediate. However, as the hurricane’s possible impact on the oil industry, crude remains in sufficient supply globally, despite the efforts led by the OPEC.
Hurricane Harvey has rapidly intensified since Thursday, potentially considered as the largest hurricane to hit the United States mainland in 12 years, and is now taking aim between Houston and Corpus Christi on the coast of Texas.