Oil is near its highest level in 6 weeks, and a new hurricane threatens US production
Oil prices recorded their highest level in six weeks during trading today, Tuesday, due to fears that the new storm may affect American production of crude oil this week, at a time when companies are trying to restore production to normal levels after it was disrupted by Hurricane Ida during the past two weeks.
Oil prices succeeded in recording the third consecutive daily rise during trading today, Tuesday, and rose to their highest levels since the beginning of last August. And spot contracts for Brent crude reached levels of $74.14 a barrel, an increase of about 0.72% on a daily basis. At the same time, Brent crude futures rose by about 0.93% and managed to reach levels of $74.19 a barrel.
As for US crude, it made strong gains, as spot contracts for US crude rose to levels of $71.06 a barrel, with a daily rise of 0.65%. US crude futures enjoyed similar gains, as they rose by 0.89%, and reached levels of $71.08 per barrel during today’s trading.
This rise in oil prices coincided with the continued evacuation of offshore oil platforms in the Gulf of Mexico in the United States again with the start of preparations for Tropical Storm Nicholas, threatening the coasts of Texas and Louisiana, which are still recovering from Hurricane Ida that hit the Gulf last August.
A state of concern dominated the oil market that Hurricane Nicholas would cause more turmoil in the Gulf of Mexico, especially as it comes at a time when crude oil production is trying to recover from Hurricane Ida. It should be noted that about 40% of US production of crude oil and natural gas in the Gulf of Mexico is still idle, according to the US Bureau of Safety and Environment, which has supported the rise in oil prices over the past days.
At the same time, the Organization of the Petroleum Exporting Countries, during trading yesterday, Monday, issued its monthly report on the expectations of demand for crude oil, and the statement indicated that OPEC reduced demand expectations during the last quarter of this year due to the delta axis and the return of closing procedures, but it kept the expectations of oil demand growth for 2021. As a whole, unchanged. The OPEC report reinforced the rise in oil prices, as it revealed that the organization raised the expectations of demand for oil during 2022 by about 4.15 million barrels per day, compared to previous expectations of recording only 3.28 million barrels.
During today’s trading, markets and various commodities and currencies are awaiting the release of important data in the United States, which will influence the decisions of the US Federal Reserve and the movements of the US dollar strongly, as the US Bureau of Labor Statistics is scheduled to announce later today the inflation data in the country during the past month. Amid expectations that the annual consumer price index will continue to rise by 5.3%.
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