HOUSTON, TX – As the price of oil climbs to its highest point in more than a month, Hurricane Delta forces operators in the gulf to halt nearly 92% of all crude oil output throughout the Gulf of Mexico.
Prices in New York rose roughly 3.1% this week as Gulf of Mexico producers ceased approximately 1.7 million barrels a day worth of oil production ahead of the hurricane, which is expected to slam into the already damaged Louisiana coast on Friday as a Category 2 hurricane.
Prices also improved as an oil-workers strike in Norway threatened roughly a quarter of the country's crude oil output. Meanwhile, several members of OPEC+ may reconsider initial plans to boost the markets output in the foreseeable future.
However, the price of crude oil currently sits within a trading range around $40 a barrel as fiscal stimulus rumors throughout the White House have yet to yield any tangible actions at a time when flagging oil demand limits price margin gains.
Speaker of the House Nancy Pelosi announced there could be no further actions on a stand-alone bill in order to aid commercial airlines, or any sector of the economy without an agreement on a broader stimulus package.
At the same time, governments around the world are responding to the evolving coronavirus situation as France is currently expanding restrictions and New York City is closing an additional 61 public schools, as the state sees the highest number of new cases since the middle of May.
Meanwhile, the oil market is indicating to the Organization of Petroleum Exporting Countries and its allies that it doesn’t need any more prod as the group is content in returning with even more supply.
With surplus of crude oil in stock, traders throughout the market believe that OPEC may opt in favor of delaying, or dispersing the oil output hike over the course of several months.
As traders look for possible indications of Mexico’s secretive annual oil hedge, many suspect that sharp declines in prices last week lead to the deal, although there hasn’t been a spike recorded in any oil option volatility at this time.
At the same time, governments around the world are responding to the coronavirus pandemic in order to allow the safe and educated return to normalcy. Throughout the U.S. transport activity has been hugely impacted during the pandemic so much in fact that oil refineries across the nation are currently producing fuel at the lowest rates of production for this time of year since the financial crisis of 2008.
In western Europe there are noticeable indications that drivers are steering clear of the roadways, as governments implement a new set of guidelines to help combat the spread of Covid-19. The combined refining margin for gasoline and diesel traded just below $10 a barrel at its lowest value seasonally since 2010.
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