Oil jumps 3% to highest level in nearly five weeks on supply losses
Oil climbed on Thursday on support from output shutdowns ahead of a storm in the U.S. Gulf of Mexico and the prospect of more supply losses in Norway.
Oil and gas workers have withdrawn from offshore U.S. Gulf production facilities as Hurricane Delta was forecast to intensify into a powerful, Category 3 storm. Nearly 1.5 million barrels of daily output was halted.
Brent crude was up 86 cents, or 2%, to $42.85 barrel, after falling 1.6% on Wednesday. West Texas Intermediate (WTI) crude settled $1.24, or 3.1%, higher at $41.19 per barrel after falling 1.8% on Wednesday.
“Hurricane Delta is a crude oil supply event, and with all of this Gulf of Mexico production offline, we will probably lose more than 5 million barrels of crude oil due to the storm,” said Andrew Lipow, President of Lipow Oil Associates in Houston, Texas.
“However, the storm is having a limited impact on gasoline and diesel demand,” he added.
The production losses offset concerns about demand, rising coronavirus cases and rising U.S. crude inventories.
Renewed optimism over some U.S. coronavirus relief aid also supported the market.
Reference: CNBC
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