SINGAPORE- Brent crude oil prices rose on Wednesday, lifted by US producers shutting most of their offshore output in the Gulf of Mexico ahead of Hurricane Laura and optimism over China-US trade talks.
But gains were capped amid renewed concern over the coronavirus pandemic, which has squeezed fuel demand, after reports from Europe and Asia of patients being re-infected with COVID-19, raising concerns about future immunity.
Brent crude oil futures added 12 cents, or 0.3 percent, to $45.98 a barrel, while US West Texas Intermediate crude CLc1 remained steady at $43.35 a barrel. Both benchmarks settled at a five-month high on Tuesday.
“The hurricane impact is short-term bullish, but that could be short-lived if the damage to the Texas and Louisiana coasts cripples demand for an extended time,” said Edward Moya, senior market analyst at OANDA in New York.
The US energy industry on Tuesday was preparing for a major hurricane strike. Producers evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84 percent of Gulf of Mexico’s offshore production – near the 90 percent outage that Hurricane Katrina brought 15 years ago.
“Markets are currently pricing in a possible near-term catastrophic gasoline shortage,” said Stephen Innes, chief global markets strategist at AxiCorp. —Reuters