Economy

Oil prices decline on Hurricane Irma

Oil prices decline on Hurricane Irma”

He added that if the hurricane drifts to the west side of the state, "then we start impacting natural gas and oil production off the coasts of Alabama and Louisiana". It has killed 14 people so far, after tearing through the Dominican Republic and Haiti, and was due in Cuba and the Bahamas before an anticipated weekend landfall in Florida.

If last Friday's sell-off is any indication, crude oil prices are likely to be under pressure this week as investors react to the impact of Hurricane Irma on near-term demand for gasoline and crude oil.

Irma knocked out power to almost 5,8 million Florida homes and businesses on Sunday after millions were told to evacuate ahead of the storm. Jose, another storm has reached Category 4 status over the Atlantic Ocean, while Hurricane Katia is threatening to barrel into Mexico.

But even if Irma doesn't disrupt US operations too severely, that doesn't mean there aren't other issues to worry about: it seems analysts are now concerned about the quicker than expected growth of the Liquefied Natural Gas (LNG) industry, with supplies said to be on course to increase by 50 percent between 2014 and 2021.

The EIA (U.S. Energy Information Administration) estimates that USA crude oil production fell 7.8% or 749,000 bpd (barrels per day) to 8.8 MMbpd between August 25 and September 1.

Finally, energy services firm Baker Hughes reported that US energy firms cut oil rigs for a third time in the past four weeks as the 14-month drilling recovery stalled with energy firms reducing spending plans in response to recent crude price declines.

USA crude settled down $1.61, or 3.3 percent, at $47.48 a barrel. It is poised for a weekly loss of more than 5%, after rising 4.9% last week 4.9% amid fears of a gasoline shortage in America (http://business.gasbuddy.com/hurricane-irma-live-updates-fuel-availability-station-outages/).

RBC said it expected the price for WTI would be around $49.30 per barrel and Brent is expected to average $52.50 per barrel for the year. The global benchmark crude traded at a premium of $5.26 to November WTI. The difference between the two crude benchmarks is a key trade for many speculators.

Currently, Saudi Arabia is gathering support among the OPEC and some non-OPEC countries to extend the duration of the output-cut agreement because it is becoming evident that the oil market may not rebalance by the end of Q1 2018, senior energy analyst at Interfax Energy's Global Gas Analytics (GGA) in London Abhishek Kumar believes.

The capacity shutdowns have done global oil prices good and now news of more possible supply disruptions are supporting them, too.

The longer-term focus, however, was on a possible extension to the 15-month production pact between members of the Organisation of the Petroleum Exporting Countries and non-OPEC producers including Russian Federation. The Saudi commitment to OPEC cuts is 486,000 bpd. According to the latest estimate from commodity pricing group S&P Global Platts, production in August from both countries combined was about a half million barrels per day above the level from October, the month used by OPEC as a peg to gauge cuts and quotas. While it should a point, it looks as if the major infrastructure of the crude oil supply chain should be spared most of the damage. Allocations to customers in Europe will drop by 70,000 bpd.

Even so, some cautioned against betting too hard on a continued Brent rally versus WTI. "What we have here is an unique hurricane situation that's giving Brent a pop, which otherwise isn't deserved".



Like this

loading...
loading...

Latest


12 September 2017
New malware Xafecopy Trojan steals money through mobile phone
Once the app is activated, Xafecopy malware clicks on web pages with Wireless Application Protocol (WAP) billing. The process also does not require the user to register a debit or credit card or set up a username and password.

12 September 2017
Polls open in New York City Mayoral Primary
Monserrate later served almost two years in prison after pleading guilty to fraud and corruption charges in a separate case. On the Republican side, state Assemblywoman Nicole Malliotakis, of Staten Island, is running unopposed.

12 September 2017
Brighton Jones LLC Purchases Shares of 13310 Netflix, Inc. (NFLX)
The Ontario - Canada-based 1832 Asset Mngmt Ltd Partnership has invested 0.01% in Netflix, Inc. (NASDAQ:NFLX) on Monday, May 1. The Zevenbergen Capital Investments Llc holds 1.20 million shares with $148.44M value, down from 1.39 million last quarter.

12 September 2017
Researchers think North Korea is stealing bitcoin to avoid sanctions
Another huge appeal for cryptocurrencies is that there's still very little regulation, though that's changing fast. The spike in activity began soon after the USA said it planned to ratchet up sanctions against North Korea.

12 September 2017
Abreu, Engel lead White Sox to win over Royals
After an ugly start to the season, he's now batting.328 for the season, trailing only Jose Altuve among American League hitters. Royals: RHP Sam Gaviglio will make his second start after being obtained on waivers September 1 from the Mariners.

12 September 2017
Indian priest Tom Uzhunnalil rescued in Yemen
The priest had made an emotional appeal for his release in a video sent by his captors in the last week of December. The priest also thanked his brothers and sisters and all relatives and friends, the daily reported.

12 September 2017
Proton-M Rocket Launches Spanish Satellite Amazonas-5 Into Orbit - Roscosmos
Amazonas 5 will slide into a parking slot in geostationary orbit at 61 degrees west longitude for a 15-year mission. Separation of the Amazonas 5 satellite occurred at approximately 9 hours and 12 minutes after lift-off.

12 September 2017
All-new Porsche Cayenne Turbo SUV gets 542bhp
The wheel arches are a bit fatter to fit its 21-inch alloy wheels, and the tailpipes are specific to the Turbo line, as well. A new three-chamber air suspension with active shock absorbers increases handling ability and comfort.

12 September 2017
Gov. Cooper announces preparations for expected Hurricane Irma impacts
By the time the storm moves across the Carolinas Irma is expected to further weaken into a tropical storm. Irma plowed through the Caribbean as a Category 5 hurricane leaving death and destruction along the way.

12 September 2017
Equities hit record as Irma weakens
That does not represent a full quelling of the unease that has gathered over sterling in the first months of Brexit negotiations. Rising tensions between the USA and North Korea have weighed on stocks in recent weeks and raised the prices of gold and bonds.