Business
16:31, 07-Sep-2017
Oil dips on fears Hurricane Irma could hit crude shipments, rising Libya output
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Fears that Hurricane Irma could interrupt crude shipments in and out of the United States caused prices to dip on Thursday - just as Libya's output begins to recover from disruptions.
However, prices received support from rising demand in the US, where Gulf Coast refineries are restarting in the wake of Hurricane Harvey, which hit the region less than two weeks ago.
US Gulf Coast facilities are slowly recovering from the devastating effects of Harvey, which forced key oil and gas infrastructure to close.
Oil dips on fears Hurricane Irma could hit crude shipments /Reuters Photo
Oil dips on fears Hurricane Irma could hit crude shipments /Reuters Photo
As of Wednesday, about 3.8 million barrels worth of daily refining capacity - roughly 20 percent - was shut in, although a number of the refineries, as well as petroleum handling ports, were in the process of restarting.
ANZ bank said on Thursday that US crude prices should receive some support “as US refineries increase their oil demand as they recover from recent flooding.”
While Harvey’s effects are slowly fading, Hurricane Irma hit Caribbean islands overnight, with wind speeds up to 185 miles per hour (295 km/h), and is heading for Florida, where fuel shortages were reported as gas stations struggled to keep up with demand from customers filling tanks ahead of the storm’s landfall, which is expected this weekend.
Reuters Photo
Reuters Photo
Another Atlantic storm, named Jose, is following Irma’s path and has been upgraded to hurricane strength by the US National Hurricane Centre, while yet another hurricane, Katia, is developing in the Gulf of Mexico.
“Demand may continue to be distorted as multiple hurricanes make their way across the Caribbean,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA.
Outside the United States, ANZ said that the return of Libya’s largest oil field to production was “less supportive” of prices.
Oil output at Libya’s Sharara field, the country’s largest, resumed on Wednesday after a valve was reopened on a pipeline shut by an armed group for more than two weeks, Libyan oil industry sources said.
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Source(s): Reuters