SINGAPORE: Brent crude oil prices rose on Wednesday as US producers shut down most of their offshore output in the Gulf of Mexico ahead of Hurricane Laura and optimism over China-US trade talks.
Brent crude oil futures added 8 cents, or 0.2 per cent, to $45.94 a barrel while US West Texas Intermediate crude was down 2 cents, or 0.1 per cent, to $43.33 a barrel. Both benchmarks had settled at a five-month high on Tuesday.
“Crude oil prices gained, dragged higher by surging gasoline futures as Hurricane Laura heads towards the US Gulf Coast,” ANZ analysts said in a note on Wednesday.
On Tuesday, the American energy industry was bracing for a major hurricane strike. Producers evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84 per cent of the Gulf of Mexico’s offshore production – near the 90 per cent outage that Hurricane Katrina brought 15 years ago.
“Markets are currently pricing in a possible near-term catastrophic gasoline shortage,” said Stephen Innes, chief global markets strategist, AxiCorp.
Further price support came from data from the American Petroleum Institute showing US crude oil stockpiles fell more than expected last week. Downward pressure came from concern about demand after data showing US consumer confidence tumbled to its lowest in more than six years due to worries over coronavirus-induced job losses.