Oil prices fell on Friday, August 28, 2020 as a massive storm raced inland past the heart of the U.S. oil industry in Louisiana and Texas without causing any widespread damage to refineries.
U.S. West Texas Intermediate (WTI) crude futures fell six cents, or 0.1 per cent to $42.98 a barrel as of 0202 GMT, adding to overnight losses.
However WTI is on track to rise 1.5 per cent rise this week, for a fourth straight week of gains.
Brent crude futures for October, set to expire on Friday, fell two cents to $45.07 a barrel, heading for a weekly gain of 1.6 per cent.
The more active November contract LCOc2 rose one cent to $45.61.
Hurricane Laura hit Louisiana early on Thursday with 150 mph (240 kph) winds, damaging buildings, knocking down trees and cutting power to more than 650,000 people in Louisiana and Texas, but refineries were spared from feared massive flooding.
“Unless there is any lasting damage to oil production infrastructure, it would not be a surprise to see oil trade down a bit after the storm as damage assessment continues,’’ AxiCorp market strategist, Stephen Innes, said in a note.
U.S. producers had shut 1.56 million barrels per day of crude output or 83 per cent of the Gulf of Mexico’s production, while nine refineries had shut around 2.9 million bpd of capacity or 15 per cent of U.S. processing capacity, ahead of the storm.
Late on Thursday, the Port of Houston, the top U.S. crude oil export hub accounting for about 600,000 barrels per day of shipments, was in the process of reopening to commercial shipping.
The earlier closures of Houston Port, Beaumont and Port Arthur were expected to reduce seaborne crude export capacity by nearly one million bpd, data intelligence firm Kpler estimated, based on average figures over the past four months.
In refining, Exxon Mobil Corp was preparing to restart units at 369,024 bpd Beaumont, Texas refinery, sources familiar with plant operations said.
“Limited refinery damage and the quick resumption of capacity is good news for crude oil demand, although for now that is not reflected in the market,’’ ING Economics said in a note.