Crude oil price rising closer to $46/barrel on Wednesday, August 25, almost reached the highest level since March. The rise was mainly caused by U.S producers move in shutting most of the Gulf of Mexico output ahead of the approaching from Hurricane Laura, and a released report showing a drop in the U.S crude oil inventories. Worries over the raging pandemic towards the diminishing demand and had sent oil prices to the record-lows in April, outperformed the gain after reports showing the coronavirus patients being reinfected, amplifying concerns about future immunity.
Brent crude LCOc1 rup by $0.02 to $45.88/barrel by August 25, 0815 GMT, while U.S. West Texas Intermediate crude CLc1 down by $0.03 to $43.32/barrel. Both of the benchmarks were settled at a five-month high on the aforementioned date.
Broker said that on that day, oil traders were mostly preoccupied with the hurricanes and once the danger subsides, the demand will come into focus again. The U.S energy industry is also preparing for a major hurricane strike as producers shutted 1.56 million barrel/day of crude output, around 84% of The Gulf of Mexico total offshore production, close to the outage 15 years ago because of Hurricane Katrina. ABN AMRO bank report said that the support is seen on the back of hurricane activity, and the risk of the coronavirus infection jeopardized oil demand further recovery.
The oil price was also boosted on Tuesday, August 25, by Chinese and the U.S official when both confirming the commitment to the Phase 1 trade deals. American Petroleum Institute figures <API/S> shows further support in the U.S crude stocks that fell lower than expected. A record cut of crude oil export as made by OPEC+, including Russia, that had succeeded in lifting Brent from the massive slump in April 21, showing only $16/barrel and marking a 21-year-low.
