Preparations were under way Sunday for the arrival of Tropical Storm Marco, in Empire, La. A second storm is forecast to hit the state on Thursday.
Photo: Gerald Herbert/Associated PressOil and gasoline futures rose Monday as two back-to-back storms that are on track to hit the Gulf of Mexico this week prompted the shutdown of some production in the region.
Wholesale U.S. gasoline futures, the benchmark for U.S. gasoline production, rose 2.4% to $1.24 a gallon on the New York Mercantile Exchange. Contracts linked to the main U.S. crude oil index advanced 0.3% to $42.45 a barrel, while Brent crude, the international gauge for oil prices, gained 0.7%.
More than 15% of U.S. oil production is based in the Gulf Coast region and nearly half of all U.S. refineries are located on its coast. That means even a temporary closure of production facilities could weigh on supply, according to Commerzbank. Ahead of the two storms, more than half of oil production in the area was shut down Sunday, according to the Bureau of Safety and Environmental Enforcement.
“There are some worries about a potentially volatile week ahead” for oil prices, said Ole Hansen, head of commodity strategy at Saxo Bank. “Apart from the Middle East, the U.S. Gulf Coast is really the most important energy hub in the world.”
The National Oceanic and Atmospheric Administration forecast that Tropical Storm Marco—currently in the Gulf of Mexico and downgraded from a hurricane Sunday night—will make landfall early Tuesday in Louisiana. The storm is followed by Tropical Storm Laura, which is expected to strengthen into a hurricane on Tuesday as it enters the Gulf of Mexico, and to make landfall in Louisiana Thursday morning.
The price boost triggered by the two storms is likely to be short-lived, some analysts said. Oil inventories remain high and outlook for demand is still uncertain as the coronavirus weighs on travel and reduces the need for fuel.
“We have seen quite a serious fall in U.S. oil demand,” said Tamas Varga, analyst at brokerage PVM Oil Associates. “If you have the same sort of data this week, it will not bode well for oil prices,” he added, looking ahead to the weekly report on stockpiles of crude oil and fuel, due from the Energy Department on Wednesday.
New cases of coronavirus are likely to weigh on economic activity globally, keeping prices capped even as the NOAA predicts this year will see a more active Atlantic hurricane season than usual.
“With these two tropical storms, hurricane season is still continuing so we are likely to have more hurricanes formed over the next three months,” said Eugen Weinberg, head of commodity research at Commerzbank. “At the moment, the market is not pricing this particular risk.”
—Joe Wallace contributed to this article.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
"oil" - Google News
August 24, 2020 at 08:46PM
https://ift.tt/3hppH9z
Oil and Gasoline Prices Climb Ahead of U.S. Gulf Coast Storms - The Wall Street Journal
"oil" - Google News
https://ift.tt/2PqPpxF
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Oil and Gasoline Prices Climb Ahead of U.S. Gulf Coast Storms - The Wall Street Journal"
Post a Comment