Oil prices rise on storm, crude draw

Oil prices reached $ 40 a barrel on Wednesday with WTI as Hurricane Sally wreaks havoc in the Gulf of Mexico.

More than 27% of all offshore oil and gas production at GoM remained closed as of Wednesday.

Combined with the crude oil stock draw reported by the Energy Information Administration, the storm raised oil prices by about 5 percent.

EDT at 4:00 pm, WTI was trading $ 1.83 (4.78%) at $ 40.11 per barrel, while Brent crude was trading $ 1.71 (4.22%) at $ 42.24 per barrel on the day. This is the first time in nearly two weeks that WTI has breached $ 40 per barrel.

According to the US Bureau of Security, a Category 2 hurricane on the Gulf coasts, Alabama, which represents all production platforms on the Gulf coasts in Alabama, caused 119 production platforms to evacuate personnel. Environmental enforcement. Dissolution has taken offline 508,366 barrels of oil production and 805 MMcfd of natural gas production. The shutdown accounts for 27.48% of all oil production in the Gulf and 29.70% of all natural gas production in the Gulf.

A further rise in oil prices on Wednesday was the EIA report that showed 4.4 million barrels of crude oil for the previous week, but the inventories are still above the five-year average as demand continues to decline.

Historic rainfall from the storm is expected to reach 35 inches, and about 400,000 homes and businesses are without electricity. Atypical to a hurricane, Sally’s slow pace is expected to prolong periods of high winds and heavy rainfall – and consequently the US Gulf’s impact on the Gulf of Mexico oil and gas production.

By Julian Geiger for Oilprice.com

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