Oil Slips Despite Major Gulf Of Mexico Production Outage

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By Julianne Geiger 

Oil Production from the United States in the Gulf of Mexico have been slashed in half ahead of what is expected to be a whopper of a storm, named Barry, the US Bureau of Safety and Environmental Enforcement (BSEE) said on Thursday, based on reports from 36 companies.

Oil companies in the United States have so far evacuated almost 200 offshore platforms ahead of the storm, including major oil producers Shell, BP, BHPExxon, and more, for a loss of roughly a million barrels of oil per day. A BSEE Hurricane Response Team is active and monitoring oil operators’ activities in the run up to and during the storm.

Nearly 30% of the 669 production platforms in the Gulf ofMexico have been evacuated.

Natural gas production has been hampered as well, taking off 44% of the usual daily production.

Nevertheless, oil prices are down on the day, with the price of WTI crude falling slightly by $0.05 per barrel or 0.08% at $60.38 per barrel at 3:30pm EST. Brent crude was trading down $0.35, or 0.52% at $66.66 per barrel.

Even reports of OPEC’s decreased June production and the increased tensions between a British tanker and Iranian guard boats late yesterday failed to lift prices beyond yesterday’s spike which saw WTI crude top $60 a barrel for the first time in nearly two months.  Both benchmarks were trading up more than 4 percent on the day yesterday as news of the hurricane and lowered US crude inventories bolstered stubborn oil markets that have failed to react proportionately to the usual price-moving stimuli.

The next wave of stimuli in the oil market will come tomorrow from Baker Hughes as it releases its weekly US rig count for oil and gas.

Crude Oil

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