Crude Oil Futures Settle Lower After Hurricane Laura Hits U.S. Gulf Coast
After three successive days of gains, crude oil prices drifted lower on Thursday, weighed down by Hurricane Laura.
The hurricane, which hit Louisiana with winds blowing at about 150 mph and causing severe damage to nearly 0.4 million people in Louisiana and Texas, forced oil refineries and rigs to shut down.
On Tuesday, oil producers had shut over 1.5 million barrels per day of crude output, nearly 85% of the Gulf of Mexico’s production, by evacuating 310 offshore facilities.
Laura made landfall just before 1 am Thursday as a category 4 storm, packing winds of 150 mph (240 kph) in the small town of Cameron, Louisiana, the National Hurricane Centre (NHC) said.
West Texas Intermediate Crude oil futures for October settled at $43.04 a barrel, down $0.35 or about 0.8% from previous close. Oil prices dropped to a low of $42.36 a barrel by late morning, but regained some lost ground subsequently, amid expectations of increased demand for gasoline.
Brent crude futures slipped $0.57 or about 1.3% to settle at $45.10 a barrel today.
According to the data released by Energy Information Administration (EIA) on Wednesday, U.S. crude inventories dropped by 4.7 million barrels in the week ended August 21, falling for a fifth straight week. That was slightly higher than an expected drop of about 4.5 million barrels.
The EIA data also showed gasoline inventories fell by 4.6 million barrels last week, while distillate stockpiles were up by 1.4 million barrels.
The American Petroleum Institute (API) reported on Tuesday a draw in crude oil inventories of 4.524 million barrels for the week ending August 21, while analysts had predicted an inventory draw of 3.694-million barrels.
The material has been provided by InstaForex Company – www.instaforex.com