Thanks to the proximity of Karen, losses were limited as the storm in the Gulf curbed supplies and increased back the prices. Brent futures fell below $109 a barrel, then edged back up above that mark on Friday.
“The storm in the U.S. Gulf will certainly lead to a reduction in loadings of crude oil, which may create some price tightness,” said Gareth Lewis-Davies, senior energy strategist at BNP Paribas.
Energy companies in the Gulf, including Exxon and BHP Billiton, shut down production and evacuated workers from offshore platforms as the storm approached a region that produces nearly a fifth of daily U.S. oil output. The National Hurricane Center said the storm was expected to be at or near hurricane strength on Friday or Saturday, and that it could reach the U.S. Gulf Coast between Louisiana and the Florida Panhandle over the weekend.
“Oil prices should ease again as soon as this temporary support disappears”, analysts at Commerzbank in Frankfurt reported. In the last hours, investor anxiety had gradually risen as the budget impasse between Republicans in the House of Representatives and the White House drags on. They argue a prolonged halt to government activities would reduce demand for energy and result in lower prices of fuels such as gasoline.
And they are not wrong at all. Brent crude fell 79 cents on Thursday, and was expected to keep dropping before Karen appeared to prevent panic in the markets. Friday’s 11.25GMT crude rose 45 cents (after a previous increase of 44 cents on late Thursday) to $109,58 on the ICE Futures exchange in London.
Be the first to comment on "Tropical Storm Karen Comes to the Rescue of Oil Prices"