The price of crude oil remained practically unchanged on Friday, despite its multidirectional movement. Market participants are still under severe pressure from the weather conditions in the Gulf of Mexico: Hurricane Laura continues to affect the operation of oil production facilities.
The price of futures contracts for Brent crude oil for delivery in October on the trading floor in London slightly increased by 0.04% or $ 0.02 and moved to the level of $ 45.11 per barrel. The brand ended Thursday's trading in the negative zone which became significantly cheaper by 1.2% or $ 0.55.
The price of futures contracts for WTI crude oil with delivery in October on the electronic trading floor in New York also demonstrated negative dynamics. It went down 0.05% or $ 0.02, leaving the current price at $ 43.02 per barrel. Thursday's trade was also unsuccessful for the brand after losing 0.8% or $ 0.35. An interruption in the growth of the WTI is already observed for three consecutive days.
The present unfavorable weather condition remains to significantly put pressure on the oil market. This is despite the fact that the strength of Hurricane Laura has slightly decreased and is now cleared from being a category 4 storm. However, it still continues to walk along the coast and now moves into the interior of Louisiana. Because of this, the risk of storms along the Louisiana coastline remains quite high.
At present, the hurricane is no longer considered catastrophic, nevertheless, its consequences can still be extremely serious and dangerous. Therefore, the activities of oil production facilities in the Gulf of Mexico are still restricted. As of yesterday, about 84.3% of all oil production capacities, and 60.1% of gas production capacities were suspended. In addition, oil refining capacity was reduced with a total volume of 3 million barrels per day.
This is not to say that the oil industry in the Gulf of Mexico has been hit hard. A hurricane is a temporary pressure factor. Usually, after the weather conditions have returned to normal, the entire industry is restored to its previous rhythm of work literally within a few days, so serious supply disruptions or other disruptions should not be expected.
The construction of oil production and processing facilities in the Gulf of Mexico took into account the difficult climatic conditions. All projects were calculated in such a way as to avoid large-scale damage from the rampant elements.
However, it should be noted that market participants reacted surprisingly to some rather significant factors in the raw materials market. Neither a significant decline in the level of oil and gasoline reserves in the US nor a powerful hurricane in the Gulf of Mexico could budge the rather sluggish black gold market.
Perhaps investors are assessing the experience of previous years, when, after the end of hurricanes, production and processing were rapidly increasing and returning to their previous volumes. However, no one can predict what kind of equipment damage the current rampant disaster will lead to.
Nevertheless, in the short term, the raw material market should still be prepared for interruptions in production and processing. However, this will have almost no effect on supplies, since the resulting excess of finished oil products compensates enough for everything. And the main consequences of the hurricane will start to be observed next week when a new portion of statistical data appears. It is then that the price of oil on the market can show jumps in one direction or another.
