Oil prices remain mixed as storms cut production in US Gulf Coast

25 August 2020 (Last Updated August 25th, 2020 12:18)

Crude oil prices have remained mixed as traders weighed large production cuts in the US Gulf Coast from tropical storms Marco and Laura against rising coronavirus (Covid-19) cases in Asia and Europe.

Oil prices remain mixed as storms cut production in US Gulf Coast
Due to the twin-storm, producers had shut Gulf Coast offshore oil production by over 1.5Mbpd. Credit: Jeff Wallace.

Crude oil prices have remained mixed as traders weighed large production cuts in the US Gulf Coast from tropical storms Marco and Laura against rising coronavirus (Covid-19) cases in Asia and Europe.

Brent crude oil futures rose by $0.09 to reach $45.22 a barrel while US West Texas Intermediate (WTI) crude dropped $0.09 to $42.53 a barrel, Reuters reported.

AxiCorp global markets strategist chief Stephen Innes said: “A jump last week in the US rig count and mixed data on Covid-19 infections are having a muted negative effect on oil this week, thanks in part to the possible disruption from two separate hurricanes moving into the US Gulf Coast region.”

Due to the twin storms, energy firms pulled workers from offshore platforms and shut down oil production, which accounted for 82% of the Gulf crude oil production.

Producers had shut Gulf Coast offshore oil production by more than 1.5 million barrels per day (Mbpd), which is 14% of the total US output.

On 24 August, a US infectious diseases expert warned that rushing out Covid-19 vaccines could actually ‘undermine’ clinical trials of other promising drug candidates.

The alert from the expert came just one day after the markets worldwide were boosted as the US regulators authorised the use of blood plasma from recovered Covid-19 patients as an option for treating the disease.

Meanwhile, leading US-China officials spoke by phone on 24 August, reporting progress on resolving issues over the interim trade deal agreed in January.

The US Trade Representative’s office said that officials from both sides are committed towards the success of the deal.

According to data from a preliminary Reuters poll, US crude oil inventories likely fell for a fifth straight week while refined product stocks were also down last week.