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Oil prices stabilized Thursday (August 27th) as a massive hurricane in the Gulf of Mexico affecting US oil industry, forcing oil drilling rigs and refineries to stop production.
Brent crude futures for October delivery, which expire on Friday, rose 13 cents, or 0.3%, to $ 45.77 a barrel, after falling 22 cents, or 0.5%, on Wednesday. Brent crude for November delivery, the most active contract, rose a to $ 46.26 a barrel. US West Texas Intermediate crude futures increased by a cents to $ 43.40 a barrel.
The risk emanating from Hurricane Laura has pushed the market higher this week, but it is not expected to affect supplies much due to the fact that stocks of oil and oil products remain high due to the damage caused by the Coronavirus pandemic to fuel demand.
Analysts say an oversupply of global supplies is putting pressure on any sentiment that tends to rise in prices from the hurricane.
US crude oil inventories stood at 507.8 million barrels at the end of the week ending August 21, even after a larger-than-expected decline of 4.7 million barrels.
On Tuesday, oil producers stopped producing 1.56 million barrels per day of crude, or 84% of the Gulf of Mexico’s production, and evacuated 310 offshore facilities.
