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An aerial view shows pumpjacks at the South Belridge oil field on April 24, 2020 near McKittrick, California.
David McNew | fake images
Oil rose Thursday on support from production cuts ahead of a storm in the US Gulf of Mexico and the prospect of further supply losses in Norway.
Oil and gas workers have pulled out of production facilities in the US Gulf offshore, as Hurricane Delta was forecast to intensify into a powerful Category 3 storm. It stopped nearby of 1.5 million barrels of daily production.
Brent crude rose 86 cents, or 2%, to $ 42.85 a barrel, after falling 1.6% on Wednesday. West Texas Intermediate (WTI) crude closed at $ 1.24, or 3.1%, higher at $ 41.19 a barrel after falling 1.8% on Wednesday.
“Hurricane Delta is a crude oil supply event, and with all this Gulf of Mexico production going offline, we are likely to lose more than 5 million barrels of crude due to the storm,” said Andrew Lipow, president of Lipow Oil Associates in Houston. , Texas.
“However, the storm is having a limited impact on gasoline and diesel demand,” he added.
Oil also gained support at the prospect of more production cuts in the North Sea due to a workers’ strike. Johan Sverdrup’s main camp will have to close unless the strike ends on October 14.
Production losses offset concerns about demand, rising coronavirus cases, and rising U.S. crude inventories.
Renewed optimism about some US coronavirus relief aid also supported the market.
After closing talks on a larger US stimulus deal, President Donald Trump wrote on Twitter that Congress should approve funding for airlines, small businesses and stimulus controls for individuals, fueling hopes of relief.
The Organization of the Petroleum Exporting Countries faces a new challenge from increased production in Libya, an OPEC member exempted from cutting production.
On Thursday, OPEC Secretary General Mohammad Barkindo said the worst was over for the oil market.
