Oil prices pull back from recent highs, as Hurricane Laura spares U.S oil infrastructure
- 28th August 2020
- Posted by: Hakeem
- Category: Commodities
Crude oil prices pulled back from recent highs as Hurricane Laura spared most of the U.S. oil infrastructure in Louisiana and Texas.
U.S. West Texas Intermediate (WTI) was relatively unchanged as it traded at $42.96 a barrel as of 6:12 GMT. Also, the U.S. West Texas Intermediate is on track to gain 1.5% rise this week, for a fourth straight week of gains.
Brent crude was up by 0.04% to trade at $45.11 a barrel, heading for a weekly upsurge of 1.6%.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics gave valuable macros, on why in spite of hurricane storm, crude oil prices are relatively negative. He said;
“Oil prices slipped after Hurricane Laura ran roughshod through Louisiana. Gulf Coast energy infrastructures were mostly spared the brunt of the damage with traders now anticipating Gulf of Mexico shut-in production to return within days given the impairment was not as bad as expected. It could be a short-term negative for oil prices.
“Also, oil traders reacted less favorably to US Fed Chair Powell’s Jackson Hole speech as there was not enough meat on the reflationary bone he served up.
“Unless there is any lasting damage to oil production infrastructure, it would not be a surprise to see oil trade down a bit after the storm as damage assessment continues.”
Crude oil traders continue to get wary whenever prices breakout to form a new higher range, especially in the context of western nations moving into the colder months where COVID-19 caseloads could continue to rise.