Oil Prices Edge Higher as Storm Threatens US Gulf Production
Global oil prices climbed above $101 a barrel on Wednesday as an approaching storm threatened oil and gas production in the US Gulf of Mexico, and renewed Houthi attacks in the region added to supply concerns.
International benchmark Brent crude futures for December delivery increased 0.9% to $101.50 per barrel, up from $100.58 at the previous close.
US benchmark West Texas Intermediate (WTI) crude futures for November delivery rose 0.8% to $90.12 per barrel from $89.44.
A storm that formed in the Gulf of Mexico on Tuesday is moving rapidly toward Louisiana and Mississippi and is expected to become the first hurricane of this year’s Atlantic hurricane season within two days, US weather forecasters said.
The US National Hurricane Centre (NHC) said early Wednesday that the system was expected to reach tropical-storm strength.
Offshore oil fields in the Gulf of Mexico along the storm’s projected path account for about 15% of US crude oil production and 5% of natural gas output.
Six refineries operated by Shell, Valero Energy, Marathon, PBF Energy and Chevron could also be affected as the storm approaches the US Gulf Coast, according to reports.
Refineries in US Gulf Coast states account for roughly half of the country’s total refining capacity of 18.2 million barrels per day.
The storm is forecast to pass through offshore areas hosting oil and gas production facilities as well as coastal areas with major refineries.
Any disruption to energy infrastructure could further tighten supplies and add to gasoline and diesel prices, which are already elevated due to the US-Israeli war against Iran.
Adding to supply concerns, fighting between Houthi group and Yemen’s government forces has intensified in recent days, particularly around Taiz and the Bab al-Mandab Strait.
Government forces have launched an operation dubbed “Operation Dawn of Yemen” against the Houthis, while the Saudi-led Arab coalition has provided air support.
Meanwhile, US commercial crude oil inventories fell by about 2.09 million barrels last week, according to data from the American Petroleum Institute (API).
The decline in inventories in the world’s largest oil consumer added to concerns about tightening supply and supported oil prices. Official inventory data from the US Energy Information Administration is due later in the day.
Oil Prices Ease on Supply Boost Expectation, Brent Dips to $101
