New Orleans Braces for Intense Floods As Tropical Storm Barry Rolls In

Daniel Fowler
July 13, 2019

On the supply side, the US Energy Information Administration reported a 9.5-mln-bbl drawdown in US crude inventory for the week ended Friday, which was also a positive for prices.

Predominant producers from BP Plc to Chevron Corp. trust evacuated crew from offshore installations, halting a third of the Gulf's output thanks to the storm.

Futures in NY were little changed after settling above US$60 a barrel on Wednesday for the first time since May.

Federal Reserve chairman Jerome Powell said there were risks that prices gains in the U.S. might persistently undershoot the central bank's inflation target and that the country's labour market was not running hot.

Even reports of OPEC's decreased June production and the increased tensions between a British tanker and Iranian guard boats late yesterday failed to lift prices beyond yesterday's spike which saw WTI crude top $60 a barrel for the first time in almost two months.

U.S. output is rising again after a brief drop from record levels, according to the EIA.

The forecasts appear to predict the need for producer club OPEC and its allies to reduce production to balance the market despite extending their existing pact, forecasting a fall in demand for OPEC crude to only 28 million barrels per day (bpd) in early 2020. The contract closed at the highest level since May 22 on Wednesday.

US Mulling 18-Month Sanctions Relief on North Korea
North Korea's state media described their meeting as "an unbelievable event". They are keen to see a freeze in this production too.

At last count, it had already cut 32% of the oil production in the Gulf and 18% of natural gas output.

West Texas Intermediate crude oil futures for August ended down $0.23, or about 0.4%, at $60.20 a barrel.

"Oil markets are being supported by factors peculiar to the summertime - hurricanes and high gasoline demand", said Satoru Yoshida, a commodities analyst at Rakuten Securities Inc.in Tokyo. The worldwide benchmark indecent traded at a US$6.47 premium to WTI for the identical month.

The storm, which could become a hurricane this week, was on a path through the north central Gulf of Mexico.

According to the British government, three Iranian vessels tried to block the passage of a British ship run by BP through the Strait of Hormuz. US crude stocks fell 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, more than triple the 3.1 million-barrel draw analysts had expected as refineries ramped up output.

In June the members of the organization extracted 29.83 million barrels per day, but the document estimates that by 2020 it will only have to supply 29.27 million.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER