(London) Oil prices picked up on Tuesday, the day after a sharp drop, helped by the shutdown of part of the production in the Gulf of Mexico because of the hurricane Zeta but in a still fragile environment on the demand side.
Posted on October 27, 2020 at 7:25 a.m.
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At around 10:50 a.m. GMT (6:50 a.m. in Montreal), a barrel of Brent from the North Sea for December delivery was worth $ 40.92 in London, up 1.14% from Monday’s close.
In New York, WTI’s US barrel for the same month gained 1.24% to $ 39.04.
The day before, the two benchmark prices lost more than 3% after hitting a low since October 5.
“Oil prices are recovering somewhat after their pronounced losses on Monday,” said Eugen Weinberg, analyst at Commerzbank, “but the situation on the oil market remains confused and worrying.”
Brent and WTI prices “get a boost from the hurricane Zeta Explained Jeffrey Halley from Oanda.
Hurricane Zeta, accompanied by strong winds and heavy rainfall, made landfall on Monday near the seaside resort of Tulum, in the Yucatan province located in southeastern Mexico, already swept away a few weeks ago by the hurricane Delta.
Zeta should then continue its course towards the coasts of the southeastern United States Thursday.
This Category 1 hurricane, the lowest on a scale of 5, however, caused “the closure of 16% of platforms in the Gulf of Mexico,” reported Avtar Sandu, of Phillip Futures.
But crude prices remain under threat of oversupply, the result of slowing demand due to the resurgence of the COVID-19 pandemic and a return to the Libyan production market.
The Libyan National Petroleum Company (NOC) on Monday announced the lifting of the state of force majeure on the last blocked oil field, declaring all oil installations operational.
Blocked for ten months, the al-Feel field usually produces some 70,000 barrels per day.
This will allow the NOC, as announced on Friday, to increase its total production to “more than a million barrels per day in four weeks”.
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