Oil prices advanced on Tuesday, supported by disruptions in Norwegian supply, another Gulf of Mexico hurricane and United President Donald Trump’s comeback to the White House after his admission for coronavirus treatment in hospital.
Bonny Light, Nigeria’s banner oil grade, gained $1.75 or 4.53% to close at $40.39 at the previous session. Qua Iboe, another key national oil grade, jumped $1.28 or 3.28% to $40.30 at 06:38 WAT on Tuesday.
An industrial action by oil employees in Norway might scale back the country’s supply by a little over 330,000 daily barrels of crude, meaning 8% of its overall output, according to the Norwegian Oil and Gas Association.
Going by Reuters calculations, natural gas constituted approximately 60% of the total cuts, while crude oil and natural gas account for the remainder.
“Besides Norway, there could also be production outages in the Gulf of Mexico this week, where another hurricane has developed,” Commerzbank said.
Oil and gas firms were evacuating offshore crude platforms as Hurricane Delta transformed to category 2 with chances of emerging a major hurricane by the time it hits the Gulf of Mexico on Tuesday.
Chevron has initiated a rescue for all its staff from its platforms in the region and is closing the facilities.
A recovery in equity markets around the world following Trump’s discharge and optimism surrounding a fresh U.S. stimulus package in the works also helped oil prices.
Prices started toppling when Trump was admitted on Friday, stirring up concerns among investors about what would happen in the U.S. as it readies for the 3rd November presidential election.
The possibility of a bipartisan U.S. economic relief package getting a legislative nod grew as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin held talks on Monday and arranged further discussion to hold on Tuesday, in a coordinated push for a common ground on legislation.
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