The crude oil surges last Friday as the impending hurricane Harvey creeps close, the United States is gearing towards a hefty hurricane, one they haven’t felt for over a decade. Prices were high as petroleum industry took caution on Harvey as it highly threatens the US Gold Coast that could lead to devastating results in inventories.
Hurricane Harvey has been expected to have a signal number 2 storm as it strides along the Gulf of Mexico with treacherous winds according to the National Hurricane Center. Petroleum companies are bracing themselves, even pulling workers as a massive precaution.
Oil Prices
As the hurricane Harvey closely approaches, oil prices saw a bit of a surge in earlier Friday trading. The US West Texas Intermediate was up by a respectable 32 cents at $47.75 a barrel; on the other hand, the Brent Crude was also up by a good amount of 39 cents at $52.43. All figures were tallied just after the market opens last Friday.
US Crude took a different route and dipped just before the market closes on Thursday. It manages to sink to astonishing levels and losing 2% in the process, the fear and mongering threat of rain and flooding had greatly strike the crude oil as the calamity may disrupt and halt operation in part of Texas. Another thing to note is when the refinery takes less oil this calamity, the US then could start taking in inventories and can result in the dreaded supply glut and over capacity.
On the other hand, the US gasoline had also risen last Friday; as a matter of fact, the prices for gasoline have been surging since Wednesday of last week to about 10% and have hit the $1.74 a gallon. The figures tally as one of the highest they have since April.
Analysts on Oil Surge and the Hurricane
A lot of analysts have been noting that the current oil surge has been a reaction to Thursday’s events; some analysts also noted that the current destruction and damages to refineries and shale fields down aren’t going to disturb the production in the Gulf of Mexico. Analysts also pointed out that the members of the Organization of the Petroleum Exporting Countries have held back production in order to keep the price a float.
On the most recent OPEC news, both OPEC and non-OPEC countries have currently pledged to cut output by as much as 1.8 million barrels per day this year until the first quarter of 2018. On the bleaker side, not all countries have managed to keep their output pledge.