TODAY.AZ / Business

Crude drops on expectations of Hurricane Nate

06 October 2017 [17:35] - TODAY.AZ

By Azernews

By Sara Israfilbayova

World oil prices are down on Friday, as investors are wary of the tropical storm Nate heading to the Gulf of Mexico.

U.S. West Texas Intermediate (WTI) crude CLc1 is down by 0.14 percent at $50.72 per barrel, meanwhile Brent crude LCOc1 dropped by 0.11 percent at $56.94 a barrel, according to RIA Novosti.

Traders are worried on the eve of the expected storm. The National Hurricane Center (NHC) informed that Hurricane Nate appeared on the coast of Nicaragua.

The Bureau of Safety and Environmental Enforcement (BSEE) reported that oil and gas companies began evacuating their employees from platforms in the American part of the Gulf of Mexico because of the storm.

The regulator also added that the companies stopped production by 14.55 percent of the production capacity of oil and 6.4 percent - gas in the Gulf of Mexico in the U.S.

Thus, oil production in the region was reduced by 254,600 barrels per day. At the same time, investors do not exclude that the refinery will suspend its work in the region, which will reduce the demand for raw materials.

Investors weighed the possibility of an extension to the OPEC-led deal against expectations that growing output in the U.S. and Libya could weigh on oil prices.

Libya restarted its largest oil field after gunmen forced a shutdown of the field over the weekend while U.S. production hit its highest level in more than two years.

Oil prices are being preserved by news about the visit between Russian President Vladimir Putin and King of Saudi Arabia Salman bin Abdulaziz Al Saud.

The sides discussed the joint actions of countries that positively influenced the situation on the market, as well as the possibility of further cooperation in this direction.

During the previous trading session, support for quotations was the prospect of extending the global OPEC pact + on limiting the extraction of raw materials.

Saudi Energy Minister Khalid Al-Falih said, within the framework of the energy week, being held on October 3-7 in Moscow that Riyadh welcomes Russia's readiness to extend the agreement by the end of 2018, as previously announced by Russian President Vladimir Putin.

OPEC and other major oil producers such as Russia and Azerbaijan reached an agreement in December 2016 to remove 1.8 million barrels a day from the market. 

OPEC and its partners decided to extend its production cuts till March 2018 in Vienna on May 25, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.

The next meeting of the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) is scheduled for the day prior to the full ministerial meeting on November 30 in Vienna.


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