Oil prices settle higher as more production shut ahead of hurricane
Over 70% of crude production in US waters has been shut
Oil prices rose on Friday as Hurricane Isaias approached the northern Gulf of Mexico, prompting companies to shut down over 70% of crude production in U.S. waters. Earlier, crude prices had fallen due to reports of productive talks between U.S. President Donald Trump and Iran, hinting at an undisclosed announcement on diesel and considering suspending the federal petrol tax.
Brent crude futures closed at $104.72, up 44 cents or 0.42%, while U.S. West Texas Intermediate (WTI) crude futures finished at $91.85, up $0.36 or 0.39%. China's decision to resume refined fuel exports after a brief pause during its Golden Week holiday also contributed to the market downturn, according to Reuters. Analysts noted that the drop in prices was influenced by Trump's pledge to engage Iran, along with China's planned resumption of exports.
Volatility in oil prices has been on the rise due to potential threats to shipping in the Persian Gulf and Strait of Hormuz, which accounted for about 20% of global oil and fuel shipments pre-war. The situation has been further complicated by Iran's review of the U.S. response to its proposal to reopen the Strait of Hormuz within seven days, amid ongoing tensions between Iran, Russia, and Ukraine.
The oil market is also grappling with Hurricane Isaias, which has led to the shutdown of approximately 1.3 million barrels per day, or 62.9% of current oil production in the Gulf of Mexico.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.