(Bloomberg) Oil held near a five-month high as Hurricane Laura disrupts production and refining in the U.S. Gulf.Futures in New York were steady near $43 a barrel. Laura made landfall early Thursday at Cameron, Louisiana, near the border with Texas, as a Category 4 storm. While the hurricane’s path shifted away from refineries and ports in the Houston area, traders are waiting to assess the full extent of the damage and its potential impact on fuel consumption.More than 80% of oil output in the Gulf of Mexico and almost 3 million barrels of a day of refining capacity has been shut ahead of Laura’s landfall, causing a spike in U.S. gasoline prices earlier this week. It’s also disrupting energy flows, with trans-Atlantic shipping rates rising and more than 60 oil and refined product tankers in the western U.S. Gulf waiting for the storm to pass, according to ship-tracking data compiled by Bloomberg.
“Whilst the U.S. hurricane season does pose acute bullish near-term price risks, they are not game changing per se with their ramifications being short-lived,” said Ehsan Khoman, head of MENA research at MUFG Bank. Production curtailments due to Laura have driven headline crude prices in recent days, he said.
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Prices
West Texas Intermediate for October delivery declined 0.3% to $43.26 a barrel on the New York Mercantile Exchange at 10:16 a.m. London time
The contract rose 0.1% Wednesday following a 1.7% jump in the previous session
Brent for the same month was little changed at $45.63 a barrel
The hurricane is likely to have only a temporary market impact, with Covid-19 continuing to cloud the prospects for a more sustainable recovery in oil prices. There are indication of the weakness everywhere with Norway’s Equinor ASA the latest to announce job cuts. India’s annual fuel demand is expected to drop to a five-year low.
Other market drivers
U.S. crude inventories fell by 4.7 million barrels last week, according to an Energy Information Administration report, the fifth straight weekly decline. Refinery run rates also increased, providing some evidence that the energy demand is rebounding.
Saudi Aramco appointed a new chief executive officer to run its $500 million venture capital and investments arm after the previous head departed, according to people with knowledge of the situation.
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