US oil: stop the wells of the Gulf of Mexico
A new hurricane is pointing to the United States and this time the trajectory points straight to the heart of the oil industry, so much that it has had to suspend over 1.2 million barrels per production day in the Gulf of Mexico, 71.1% of total: a cut similar to Opec’s, which however did not ignite barrel quotes. By contrast, the session closed with a fall of over 2%, which brought the Brent to $ 55.40 and the Wti to $ 49.01
The latest upgrades on oil infrastructure by the Bureau of Safety and Environmental Enforcement (BSE) have arrived about an hour after the closure of US markets. But the risks were already evident.
After sowing destruction and killing some twenty people in Central America, Hurricane Nate should arrive in the US in the next few hours, touching land near New Orleans, Louisiana, an area that has already suffered terrible devastation in 2005 because of ‘Hurricane Katrina, which is home to numerous refineries and oil terminals, including the Louisiana Offshore Oil Port (Loop), a crucial hub for transport and storage.
Several companies had begun to evacuate the oil platforms in the Gulf of Mexico since Thursday. Bp and Chevron, among the major operators in the area, had suspended all activities. Obviously, this was not enough to alarm investors, who continued to push down oil prices, canceling Thursday’s upsets.
Weather forecasts indicate that Hurricane Nate will never acquire extreme violence: it should stop at Category 1 (Harvey had reached Category 4, Katrina even in Category 5). It is also unclear whether the worst threat for the next few days concerns mining facilities or refineries. In the second case, it would be a downward factor for crude because the demand would be compromised.
The market, however, seemed almost to overwhelm the hurricane effect. And the enthusiasm for the Russian-Saudi agreements, which are preparing the ground for a prolongation of Opec Plus’s production cuts, has also come to a hasty pace. Sales (especially those of algorithmic funds) were the dollar, which has risen to the maximum of ten months.