Oil rose toward $46/bbl on Aug. 26, near the highest since March, lifted by U.S. producers shutting most of their offshore Gulf of Mexico output ahead of Hurricane Laura and a report showing a drop in U.S. crude inventories.
Renewed worries over the COVID-19 pandemic, which has squeezed demand and sent prices to record lows in April, capped gains after reports this week of patients being re-infected, raising concerns about future immunity.
Brent crude rose 2 cents to $45.88/bbl by 3:15 a.m. CT (8:15 GMT), while U.S. WTI crude fell 3 cents to $43.32. Both benchmarks settled at a five-month high on Aug. 25.
"Oil traders will be preoccupied with the hurricane today," said Tamas Varga of broker PVM. "Once the danger passes, demand considerations will come into focus again."
RELATED:
Hurricane Laura Poses Biggest Threat to US Oil in 15 Years
The U.S. energy industry was preparing on Aug. 25 for a major hurricane strike. Producers shut 1.56 million bbl/d of crude output, representing 84% of the Gulf of Mexico's offshore production and close to the 90% outage that Hurricane Katrina brought 15 years ago.
"We do see some support on the back of hurricane activity," Dutch bank ABN AMRO said in a report. "The threat of being infected by the COVID-19 virus threatens a further recovery in oil demand."
Oil was also boosted on Aug. 25 by U.S. and Chinese officials reaffirming their commitment to a Phase 1 trade deal. Further support came from American Petroleum Institute (API) figures showing U.S. crude stocks fell more than expected.
A record oil output cut by OPEC and allies including Russia has helped to lift Brent from April's 21-year low below $16.
The U.S. government's Energy Information Administration report at 9:30 a.m. CT (14:30 GMT) will be in focus to see if it confirms the API figures.
Recommended Reading
Deep Well Services, CNX Launch JV AutoSep Technologies
2024-04-25 - AutoSep Technologies, a joint venture between Deep Well Services and CNX Resources, will provide automated conventional flowback operations to the oil and gas industry.
Matador Hoards Dry Powder for Potential M&A, Adds Delaware Acreage
2024-04-24 - Delaware-focused E&P Matador Resources is growing oil production, expanding midstream capacity, keeping debt low and hunting for M&A opportunities.
TotalEnergies, Vanguard Renewables Form RNG JV in US
2024-04-24 - Total Energies and Vanguard Renewable’s equally owned joint venture initially aims to advance 10 RNG projects into construction during the next 12 months.
Ithaca Energy to Buy Eni's UK Assets in $938MM North Sea Deal
2024-04-23 - Eni, one of Italy's biggest energy companies, will transfer its U.K. business in exchange for 38.5% of Ithaca's share capital, while the existing Ithaca Energy shareholders will own the remaining 61.5% of the combined group.
Weyerhaeuser, Lapis Energy Enter Carbon Sequestration Exploration Pact
2024-02-29 - The exploration agreement covers 187,500 acres across three states with five potential carbon sequestration sites.