Oil mixed, producers bracing for Hurricane Laura

LONDON, August 26, 2020 – Oil was mixed on Wednesday morning in Asia, with producers shutting off most offshore output in the Gulf of Mexico ahead of Hurricane Laura.

Brent oil futures were up 0.24% to $46.40 by 12:06 AM ET (5:06 AM GMT) and WTI Futures inched down 0.02% to $43.34.

As many as 310 offshore facilities have been evacuated, and around 84% of Gulf of Mexico offshore production has been shut down as the industry prepares for a major hurricane strike. Laura poses the region’s biggest storm threat since Hurricane Katrina in 2005, which caused a 90% shutdown.

“Crude oil prices gained, dragged higher by surging gasoline futures as Hurricane Laura heads towards the US Gulf Coast,” ANZ analysts said in a note.

But other investors sounded a more ominous note.

“Markets are currently pricing in a possible near-term catastrophic gasoline shortage,” Stephen Innes, chief global markets strategist at AxiCorp, told Reuters.

But prices were boosted by the optimism over US-China relations, with officials from both countries reaffirming commitment to their phase one trade deal. China’s recommitment to the deal could see a potential boost in flows between two of the world’s largest oil consumers.

Also capping losses was Tuesday’s data from the American Petroleum Institute (API)predicting a fall in crude oil supplies. API reported a draw of 4.5 million barrels, slightly larger than the previous week’s 4.26 million-barrel draw.

Investors now await inventory data from the US Energy Information Administration (EIA), due later in the day.

First published on Investing.com

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