Succour as oil price climbs to $40
Oil price climbs by two per cent on Tuesday to $40, supported by hurricane supply disruptions in the United States, but demand concerns loomed as energy industry forecasters predicted a slower-than-expected recovery from the pandemic.
Brent crude gained 92 cents, or 2.3 per cent, to settle at $40.53 a barrel, while U.S. West Texas Intermediate crude futures rose $1.02, or 2.7 per cent, to settle at $38.28 a barrel. Both contracts fell on Monday, according to Reuters.
Futures gained ahead of Hurricane Sally’s expected landfall on the US Gulf Coast. More than a quarter of US offshore oil and gas production was shut and key exporting ports were closed as the storm’s trajectory shifted east toward western Alabama, sparing some Gulf Coast refineries from high winds.
“Harsh weather events in the US cause some unpredictability about its oil production and that’s always good news for prices,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets.
The outlook for oil demand remained weak, capping price gains.
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