Crude Oil Prices Rise as Hurricane Makes its Way into the GulfBy Antonio Trujillo | Fri, 08/27/2021 - 15:36
US-based oil companies have started to evacuate workers and vessels from the Gulf of Mexico, as Tropical storm Ida makes its way into the area, causing crude oil prices to rise considerably following a bad week due to a fire at one of PEMEX´s platforms.
On Thursday, oil companies began evacuating efforts in their facilities and platforms while airlifting workers and moving vessels away from the wake of a potentially-devastating hurricane Ida, scheduled to make its way during the weekend.
Oil prices have benefited from the expected halt on operations, anticipating disruptions in production, and taken an upward trajectory: Brent crude went up 1.4 percent, or a US$1.02 gain, while West Texas Intermediate (WTI) climbed 1.6 percent, or a US$1.09 gain. Brent is looking good for a 10 percent weekly gain, its best since June 2020, while WTI stands at 9 percent, its best since September 2020.
Edward Moya, senior marketing analyst at ONDA commented that “energy traders are pushing crude prices higher in anticipation of disruptions in output in the Gulf of Mexico and on growing expectations OPEC might resist raising output given the recent Delta variant impact over crude demand."
All major companies have begun evacuating initiatives, including BHP, Chevron, BP, and Royal Dutch Shell. BHP and BP have begun shutting down production at offshore facilities. Others, among Exxon Mobil, have prepared their refineries for severe weather conditions. Additional companies will adjust according to the storm’s progression. Non-essential personnel are also being evacuated. Oil production in the Gulf accounts for 17 percent of all US crude oil production and upwards of 45 percent of all the US’ oil production capacity lies along the Gulf Coast.
These growing prices come as a relief for the industry, following Tuesday’s downward dive due to the fire that engulfed PEMEX’s Gulf of Mexico´s facilities last Sunday, and which left five dead and operations deeply affected, not expected to return to normal until August 30 according to the company’s own schedule.
“The market may have more immediate concerns with such a storm in the Caribbean. It is expected to become a powerful hurricane and to potentially wreak havoc in the Gulf of Mexico and Texas early next week,” reported ANZ Research. According to data published by the National Hurricane Center, there’s a growing concern for a risk of flooding along the coasts of Louisiana, Mississippi, and Alabama.