Fri. Sep 25th, 2020

Fxtriangle | Market analysis | Managed trading

Fxtriangle will make Fx trading look easy.

Oil Holds at Five-Month High as Hurricane Nears U.S. Gulf Coast

2 min read

Oil held near a five-month high as Hurricane Laura bore down on key refining facilities on the U.S. Gulf Coast, with forecasts saying it will strengthen rapidly into a “potentially catastrophic” Category 4 storm.

Futures in New York were steady after jumping 1.7% on Tuesday. The storm is expected to make landfall late Wednesday or early Thursday along the Texas-Louisiana coast, according to the National Hurricane Center. More than 84% of oil output in the Gulf of Mexico has now shut, while almost 3 million barrels a day of refining capacity has been closed.

Prices also got a boost after the American Petroleum Institute reported U.S. oil inventories fell by 4.52 million barrels last week and gasoline stockpiles shrunk by 6.39 million barrels, according to people familiar with the data. That would be the fifth straight weekly decline in crude supplies if the industry estimates are confirmed by official data due Wednesday.

Laura has the potential to take some big refineries offline and disrupt global energy flows. On its current track, the storm could lead to around 10% to 12% of U.S. refining capacity being shut for more than six months, according to a disaster modeler with Enki Research. Tanker rates to ship gasoline from Europe to the U.S. are already surging even before Laura makes landfall.

“Oil traders will be pre-occupied with the developments of the hurricane today,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. “The most dangerous hurricane of the past 15 years is approaching the major U.S. oil producing and refining center.”

The hurricane will likely only have a short-term impact on global prices, however, with this year’s lackluster summer driving season nearing an end and a pickup in consumption remaining uncertain due to the pandemic. Gasoline demand in key consuming nations appears stuck at about 10% to 15% below year-earlier levels, while jet fuel usage is much further behind.

Leave a Reply

Forex trading and any instruments related to Foreign Exchange Market are Speculative and carry substantial risk of loss of either partial equity or the entire deposit amount. Leverage adds up to the risk, before considering to invest in this venture, you should first consider your financial position and may seek the help of an independent financial advisor. FXtriangle dis-recommends the usage of loan instruments to trade in this market as it can hamper financial position. Please do not invest the money that you cannot afford to lose. FXtriangle provides all its services throughout the Globe Excluding (Nigeria, British Virgin Island & the Islamic Republic of Iran) and also provides limited service in some jurisdictions where investment in Overseas markets / Fx Exchanges are prohibited by Law If you are not sure to contact us before using any of our services. FXtriangle acts as an Independent Corporate Financial Advisor and connects you to various overseas exchanges and cannot be held liable for any financial damage occurring through their side. All of our partnered institutions are regulated in various jurisdictions.FXtriangle conducts an independent background check before partnering with any institutions to fulfill your investment objectives smoothly. The usage of our Business name, Logo or any trademark in any financial forum, website, review website, complaint arena, Billboards without our written permission will attract lawsuits.