Oil prices were steady as Hurricane Laura raced over evacuated oil production platforms in the US Gulf of Mexico, taking aim at the refining hub of the country’s oil industry.
Brent crude oil futures rose $0.13, or 0.3%, to $45.77 a barrel while US West Texas Intermediate (WTI) crude increased by $0.01 to reach $43.40 a barrel, Reuters reported.
Hurricane Laura threat drove the market higher this week.
However, the supplies are not expected to be affected due to the storm. This is because oil and product stocks remain high as a result of the Covid-19 outbreak’s impact on fuel demand.
Commonwealth Bank commodities analyst Vivek Dhar was quoted by the news agency as stating: “It really depends on the damage sustained. But there’s huge mitigation in that (crude) stockpile levels are at their highest in decades”.
Tropical storm Laura may be the most powerful storm to crash along the Louisiana coast when it makes ‘landfall’ in the early hours of 27 August.
The storm surge is going to bring ‘catastrophic’ damage and what forecasters called an ‘unsurvivable’ increase.
ING analyst Warren Patterson said: “The hurricane has been upgraded to a Category 4, and there are real concerns over the impact when the storm makes landfall.”
According to the forecast of the US National Hurricane Centre, the ‘oil-refining town’ of Port Arthur was directly in the path of the storm.
On 25 August, the US energy industry prepared for a major hurricane strike, cutting crude production at a rate of 1.56Mbpd, which accounted for 84% of the Gulf crude oil production. The production was evacuated at 310 offshore facilities.
Another nine refineries capable of converting 2.9Mbpd of oil into fuel were also closing down.