Oil prices were broadly steady on Thursday as a sweeping hurricane in the Gulf of Mexico made a landfall in the heart of the U.S. oil industry, compelling oil rigs and refineries to shut down.
Brent crude futures for October, set for expiration on Friday, climbed by 6 cents, or, 0.1% to $45.70 a barrel by 10:42 West Africa Time. The more active November Brent contract was virtually flat at $46.17 per barrel.
U.S. West Texas Intermediate crude futures dipped by 8 cents or 0.2% to $43.31 a barrel.
On Wednesday, Bonny Light, Nigeria’s premier oil grade, dropped by 19 cents or 0.42% to $45.03 a barrel. But Qua Iboe, another major crude grade, appreciated by 62 cents or 1.36% to $46.35 per barrel.
Hurricane Laura made a landfall early on Thursday in southwestern Louisiana as a category 4 storm, one of the most powerful to hit the state, with forecasters warning it could push a wall of water 40 miles inland from the sea.
Oil producers on Tuesday had closed down 1.56 million barrels per day (bpd) of crude production, or 84% of the Gulf of Mexico’s output, rescuing 310 offshore facilities.
Simultaneously, refiners who convert almost 2.33 million bpd of crude oil into fuel, and account for approximately 12% of U.S. processing, suspended production.
“The response of the oil price has been remarkably cool so far,” Commerzbank said.
Oil prices also bucked U.S. crude stockpile declines and signs that demand for gasoline in the world’s biggest oil consumer were improving.
Crude oil inventories dropped last week as exports surged the most in a year and a half and refineries lifted output to the highest rate since March, Energy Information Administration revealed on Wednesday. Gasoline storage also fell.
“It appears that the gasoline inventory reduction was due first and foremost to increased demand – gasoline demand rose to a six-month high of around 9.2 million bpd,” Commerzbank said.
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