Oil prices dip as producers, refiners avoid worst of hurricane

Published : Sunday, 30 August, 2020 at 12:00 AM Count : 280

NEW YORK, Aug 29: Oil prices inched lower on Friday as Hurricane Laura passed the heart of the US oil industry in Louisiana and Texas without causing any widespread damage and companies began to restart operations.
Brent crude futures LCOc1 for October fell 4 cents to settle at $45.05 a barrel, before expiring on Friday. US West Texas Intermediate (WTI) crude CLc1 fell 7 cents to $42.97 a barrel.
Both benchmarks notched weekly gains of about 1.5per cent, with WTI rising for a fourth straight week. The benchmarks hit five-month highs during the week as US producers cut crude output ahead of Laura at a rate close to the level of 2005's Hurricane Katrina. "The oil trade has been featured by strong advances at the start of the week as a sizable amount of storm premium was pumped into the market ahead of Hurricane Laura, followed by a major erasure of hurricane premium following the storm's arrival as limited impact on offshore crude production or refinery activity was indicated," said Jim Ritterbusch, president of Ritterbusch and Associates.
The oil market has had an unusually long spell of low volatility, analyst Eugen Weinberg at Commerzbank said, in contrast with stock markets.
"It didn't even react to a weaker dollar. There's no impulse in either direction. It has seldom had so little volatility for such a long period, especially given the dynamic situation on the demand and supply sides," Weinberg said.

Laura, since downgraded to a tropical depression, hit Louisiana early on Thursday with winds of 150 miles per hour (240 km per hour). The storm killed at least six people, damaged buildings and felled trees. Power was cut to hundreds of thousands in Louisiana and Texas, but refineries were spared from massive flooding.
Shut offshore crude oil production in the US-regulated northern Gulf of Mexico remained at 84.3per cent, or 1.55 million barrels per day (bpd), the US government said in a report.
Shell said it was beginning to redeploy personnel to all its assets in the Gulf of Mexico that were not impacted by the storms, including those in the Norphlet and Mars Corridors. -Reuters