Oil prices rise toward 5-month high on storm-driven output cuts

By Scott DiSavino NEW YORK (Reuters) - Crude oil prices rose on Tuesday, headed toward a five-month high as U.S. producers shut most output in the Gulf of Mexico ahead of Hurricane Laura even as rising coronavirus cases in Asia and Europe capped gains

Reuters August 26, 2020 00:06:53 IST
Oil prices rise toward 5-month high on storm-driven output cuts

Oil prices rise toward 5month high on stormdriven output cuts

By Scott DiSavino

NEW YORK (Reuters) - Crude oil prices rose on Tuesday, headed toward a five-month high as U.S. producers shut most output in the Gulf of Mexico ahead of Hurricane Laura even as rising coronavirus cases in Asia and Europe capped gains.

Brent futures rose 83 cents, or 1.8%, to $45.96 a barrel by 1:22 p.m. EDT (1722 GMT), while U.S. West Texas Intermediate crude rose 83 cents, or 2.0%, to $43.45.

That puts both benchmarks on track to settle at their highest since March 5.

U.S. producers cut crude output ahead of Hurricane Laura at a rate approaching the level of 2005's Hurricane Katrina and halted most oil refining along the Texas/Louisiana coast.

Laura is expected to strengthen into a major hurricane with 115 mile per hour (185 kph) winds when it strikes the coast near the Texas-Louisiana border early Thursday, according to the U.S. National Hurricane Center.

On Monday, energy firms shut 1.5 million barrels per day of crude output, 82% of Gulf of Mexico's offshore production, near the 90% outage that Katrina brought 15 years ago.

"The storm factor will remain a primary focus in the energy complex through the rest of this week, likely overshadowing tomorrow's (Energy Information Administration) report as a significant price driver," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Analysts forecast U.S. crude stockpiles fell for a fifth week in a row last week, according to a Reuters poll conducted ahead of reports from the American Petroleum Institute (API) on Tuesday and the U.S. Energy Information Administration on Wednesday.

"Overall, hurricanes may be limiting supply this week ... but the market will soon again focus on the biggest hurricane of them all, COVID-19," said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

Europe is seeing a rise in coronavirus cases, including re-infection. Two re-infections were reported in Europe and one in Hong Kong.

Elsewhere, U.S. and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal.

(Additional reporting by Julia Payne in London and Jessica Jaganathan in Singapore; Editing by Barbara Lewis, Kirsten Donovan, David Gregorio and Richard Chang)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.