Oil prices climb as Hurricane Sally disrupts production in Gulf of Mexico

Sep 16, 2020

Oil prices climb as Hurricane Sally disrupts production in Gulf of Mexico

New York (USA), September 16: Oil prices gained on Tuesday as an expected landfall of Hurricane Sally on the U.S. Gulf Coast disrupted energy production in the area.
The West Texas Intermediate for October delivery climbed 1.02 U.S. dollars to settle at 38.28 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery advanced 92 cents to 40.53 dollars a barrel on the London ICE Futures Exchange.
Sally is taking aim at the Gulf Coast, passing near the coast of southeastern Lousiana state on Tuesday and making landfall late in the day or early Wednesday, the National Hurricane Center said. Forecasters warned that Sally could become a Category 3 major hurricane when making landfall along the coast of Mississipi and Alabama.
"Since Sally is forecast to be moving very slowly around the time of landfall, a slower rate of weakening is indicated since a large portion of the circulation will remain over water for some time," the National Weather Service said.
The U.S. Bureau of Safety and Environmental Enforcement on Tuesday estimated that nearly 27 percent of oil production in the Gulf of Mexico has been shut in, along with 28.03 percent of natural-gas production, as a precaution.
Phillips 66, a U.S. multinational energy company, shut down its refinery in the state of Lousiana, while oil industry companies Chevron Corporation and Royal Dutch Shell were among those that idled facilities in the Gulf of Mexico.
Sally is the second hurricane that hit the Gulf Coast in less than a month. When Hurricane Laura passed through the Gulf of Mexico late last month, as much as 1.5 million barrels per day of oil output was shut.
U.S. Gulf of Mexico offshore oil production makes up about 17 percent of U.S. crude oil and 5 percent of U.S. natural gas output.
Source: Xinhua News Agency