On Friday, the oil prices increased as the U.S petroleum industry started its massive output distractions as Hurricane Harvey is reaching the heart of the nation’s oil industry in the Gulf of Mexico. Since Thursday, the storm has speedily intensified, spinning into potentially the biggest hurricane to hit the U.S. mainland in 12 years and taking aim between Houston and Corpus Christi on the coast of Texas. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $47.74 a barrel, up 31 cents ( 0.7 percent) from their last settlement. International Brent crude futures LCOc1 were at $52.39 per barrel, up 35 cents (0.7 percent) from their last close. Prices increased as production in the affected area shut down in preparation for the hurricane, and on expectations that closures could last if the storm causes extensive damage.
The senior market analyst at futures brokerage OANDA, Jeffrey Halley said that damage and flooding to refineries and shale fields disrupted production in the Gulf of Mexico and infrastructure damage is unlikely to be bearish for WTI. Since Wednesday, the U.S. gasoline prices RBc1 have boosted up by almost 10 % to $1.73 per gallon and it has been considered their highest level since April as refiners also shut down in preparation for the storm. Beyond the storm’s potential impact on the oil industry, crude remains in ample supply globally despite efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to hold back production in order to prop up prices. On Thursday, a joint OPEC, non-OPEC monitoring ministerial committee said that an extension to the supply-cut pact beyond March was possible, though not yet decided.