Crude oil prices remained stable on Monday after the storms in the Gulf of Mexico, halting more than half of oil production in the region. However, prices reamin limited by ongoing concerns about fuel demand coronavirus lockdowns.
Brent futures LCOc1 slipped 2 cents, or 0.1%, to $44.33 a barrel by 0316 GMT, while West Texas Intermediate (WTI) crude CLc1 was down 2 cents, or 0.1%, to $42.32 a barrel. Both benchmark contracts had risen early on Monday.
On Sunday, Hurricane Marco and Tropical Storm Laura broke through the Caribbean and the Gulf of Mexico, forcing energy companies to withdraw their workers from offshore platforms and stop oil production.
The region accounts for 17% of total US oil production and 5% of US natural gas production. Producers stopped 58% of the Gulf’s offshore oil production and 45% of its natural gas supply on Sunday.
Crude oil prices soared as a double storm in the Atlantic could cause major disruptions to oil operations in the Gulf of Mexico. However, as the virus uncertainty continues to put pressure on the raw demand outlook, oil’s gains will likely calm down.
The global death toll from the coronavirus exceeded 800,000 on Saturday, with the United States, Brazil and India leading the rise in deaths, according to the data.
In addition, the number of US oil and natural drilling rigs rose for the first time since March this week, limiting the potential for price increases. As shale gas oil producers started drilling again, energy companies added the most oil rigs in seven months.
An important development pointed out by members of the Organization of Petroleum Exporting Countries (OPEC) and other oil powers, including Russia, due to an excess supply caused from May to July by some of the countries in the OPEC + group who pumped above the targeted supply cuts, that the production should be reduced by more than a million barrels a day over two months to compensate the excessive supply.