Investing.com – Crude prices snapped a two-day slide to rise about 1% on Tuesday, supported by worries of a hurricane swirling toward the oil-rich U.S. Gulf Coast and data showing Iranian crude exports down by more than half before sanctions beginning next month.
Companies operating in the Gulf shut down nearly 20% of their oil production as Hurricane Michael approached the region, where it was expected to make landfall on Wednesday as a Category 3 storm.
According to forecasts by various weather services, Michael could deliver the most powerful strike in at least a decade on the Panhandle, a 200-mile strip on northwest Florida that’s home to the state’s largest crude and natural gas fields. The Panhandle previously took direct hits from Hurricane Ivan in 2004 and Hurricane Dennis in 2005.
But a Reuters report suggested the hurricane’s track would largely avoid major oil-producing assets in the Gulf, although a change in that path could widen its impact.
On Iran, data by Refinitiv Eikon showed the Islamic Republic exported 1.1 million barrels per day in the first week of October, down from at least 2.5 million bpd in April. An industry source who also tracks Iranian shipments, meanwhile, suggested an even lower volume, at below 1 million.
U.S. sanctions against Tehran are to begin on Nov. 4. But the Trump Administration has been reported this week to be mulling waivers for some buyers of Iranian crude vs. a target of zero shipments it set initially to punish Iran for its nuclear program.
“Overall, I remain neutral here as I still think there is too much optimism in the market,” said Scott Shelton, energy broker for ICAP (LON:) in Durham, North Carolina.
West Texas Intermediate (), the U.S. benchmark for crude, settled up 67 cents, or 0.9%, at $74.96 per barrel on the New York Mercantile Exchange.
Global crude benchmark , traded in London, rose $1.07, or 1.3%, to $84.98 by 2:43 PM ET (18:43 GMT). Brent hit an October 2014 high of $86.74 last week, while WTI peaked at $75.20, its loftiest price since November that year.
Some voiced doubts the market could reprise those highs this week ahead of on Thursday that could show another outsize weekly build.
Polls indicate that the U.S. Energy Information Administration (EIA) could report a 2.65-million-barrel crude build for the week ended Oct. 4. There are worries, however, that the number could be a lot higher after the previous week’s figure that came in four times above forecasts at 8 million barrels.
On Thursday, OPEC unveils its monthly crude supply-demand .
Another closely-followed global oil forecaster, the Paris-based International Energy Agency (IEA), will issue on Friday and expectations for 2018 and beyond.
The IEA made a direct appeal to OPEC and other major oil producers on Tuesday to boost output, warning that prices were entering a “Red Zone” that could inflict damage on the global economy.
Elsewhere in U.S. energy trading, fell 0.6% to $2.07 per gallon, while , which is also a proxy for diesel and other distillates, rose 1.1% to $2.42. climbed 0.2% to $3.274 per million metric British thermal units.
Source: Investing.com
