Oil Rises as Hurricane Approaches US Gulf of Mexico

Oil prices rose on Thursday as employees evacuated drilling rigs in the U.S. Gulf of Mexico ahead of Hurricane Delta, despite concerns about fuel demand due to diminishing chances of a US economic stimulus deal.

U.S. West Texas Intermediate (WTI) crude futures rose by 0.68% to $40.22 a barrel at the end of today's trading, after falling 1.8% on Wednesday.

Brent crude futures also rose 0.74% to $42.30 a barrel, after falling 1.6% yesterday.

Oil producers such as Chevron Corporation have evacuated 183 offshore facilities and halted nearly 1.5 million barrels per day of oil production with Hurricane Delta expected to intensify into a storm with winds of up to 120 miles per hour.

In July, the U.S. Gulf of Mexico produced 1.65 million barrels per day, accounting for 17% of US crude production, yet, several storms over the past months affected oil production.

Also, strikes in Europe’s North Sea by Norwegian workers supported oil prices. The largest oil field in the North Sea is expected to shutdown unless the strike ends by mid October.

Meantime, hopes for an increase in US fuel demand evaporated as stimulus negotiations have stalled a day after President Donald Trump paused talks on a broad relief package as demand for oil at U.S. refineries is 13.2% lower than a year earlier, underscoring the plunge in demand caused by the pandemic.