Oil Gains as Storm Causes US Gulf Production Halts
EghtesadOnline: Oil prices rose on Monday as a tropical storm in the Gulf of Mexico forced companies to evacuate rigs and halt production, but gains were kept in check by wider concerns about excess supply and falling fuel demand.
US West Texas Intermediate crude futures were up 18 cents, or 0.5%, at $37.51 a barrel. Brent crude gained 9 cents, or 0.2%, to $39.92 a barrel, CNBC reported. Both contracts ended last week lower, falling for a second week in a row.
Tropical Storm Sally gained in strength in the Gulf of Mexico west of Florida on Sunday and was poised to become a category 2 hurricane. The storm is disrupting oil production for the second time in less than a month after hurricane Laura swept through the region.
Typically oil rises when production is shut, but with the coronavirus pandemic getting worse demand concerns are to the fore, while global supplies continue to rise. The US is the world’s biggest oil consumer and producer.
In Libya, commander Khalifa Haftar committed to ending a months-long blockade of oil facilities, a move that would add more supplies to the market, although it was unclear if oil fields and ports would begin operations.
“The announcement that the blockade of Libyan oil export terminals may be about to end will add to the woes of OPEC+’s meeting this week,” said Jeffrey Halley, senior market analyst at OANDA.