Crude prices move higher as markets brace for Hurricane Harvey
LONDON, August 25, 2017 – Crude oil prices moved higher on Friday, as energy companies pulled workers from offshore oil platforms and halted onshore drilling in south Texas in preparation for Hurricane Harvey.
The U.S. West Texas Intermediate crude September contract was at $47.76 a barrel by 06:30 a.m. ET (10:30 GMT), up around 33 cents or 0.70%.
Brent oil for October delivery on the ICE Futures Exchange in London advanced 35 cents or 0.67% to $52.38 a barrel.
Oil prices strengthened as markets prepared for potential output disruptions as Hurricane Harvey headed for the heart of the U.S. oil industry in the Gulf of Mexico.
The storm has intensified since Thursday and could potentially be the biggest hurricane to hit the U.S. mainland in 12 years. It is currently taking aim between Houston and Corpus Christi on the coast of Texas.
The commodity was hit earlier in the week after the U.S. Energy Information Administration said domestic crude production rose to its highest level since July 2015, although crude oil inventories fell for the eight consecutive week.
Oil prices have also been under pressure in recent weeks despite efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to limit production in order to boost prices.
OPEC and 10 producers outside the cartel, including Russia, agreed since the start of the year to slash 1.8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market.
So far, the deal has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in U.S. shale output.
Elsewhere on Nymex, gasoline futures for September were up 0.3 cents or roughly 1.87%, to $1.714 a gallon, while September heating oil gained 0.2 cents or 1.34% to $1.643 a gallon.
Natural gas futures for September delivery dropped about 0.1 cent or 0.51% to $2.934 per million British thermal units.