By Ahmad Ghaddar
LONDON (Reuters) – Oil prices eased on Thursday as a massive hurricane in the Gulf of Mexico made landfall in the heart of the U.S. oil industry, forcing oil rigs and refineries to shut down.
Brent crude <LCOc1> futures for October, which expire on Friday, fell 25 cents, or, 0.6% to $45.39 a barrel by 1223 GMT. The more active November Brent contract <LCOc2> was down 28 cents, or 0.6%, at $45.88 per barrel.
U.S. West Texas Intermediate (WTI) crude <CLc1> futures fell 26 cents or 0.6% to $43.13 a barrel.
Hurricane Laura made landfall early on Thursday in southwestern Louisiana as a category 4 storm, one of the most powerful to hit the state, with forecasters warning it could push a wall of water 40 miles inland from the sea.
Oil producers on Tuesday had shut 1.56 million barrels per day (bpd) of crude output, or 84% of the Gulf of Mexico’s production, evacuating 310 offshore facilities.
At the same time, refiners that convert nearly 2.33 million bpd of crude oil into fuel, and account for about 12% of U.S. processing, halted operations.
“Perhaps traders are waiting to see what the damage is but the limited impact so far may also just be a reflection of the current oil market dynamics. Temporary disruptions are easily covered,” OANDA analyst Craig Erlam said.
Oil prices also shrugged off U.S. crude inventory declines and signs that gasoline demand in the world’s biggest oil consumer were improving.
Crude oil stockpiles fell last week as exports soared the most in 18 months and refineries boosted production to the highest rate since March, Energy Information Administration data showed on Wednesday. Gasoline stocks also fell. [EIA/S]
“It appears that the gasoline inventory reduction was due first and foremost to increased demand – gasoline demand rose to a six-month high of around 9.2 million bpd,” Commerzbank said.
(Additional reporting by Sonali Paul and Koustav Samanta; editing by Jason Neely)
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