Oil prices hit as US gulf coast faces hurricane

7 Oct 2017   Prices

The price of crude oil was driven down on Friday as Tropical Storm Nate was forecast to strengthen and hit the US Gulf of Mexico coast with hurricane force winds on Saturday night, and as traders anticipate disruption to refineries. West Texas Intermediate, the US crude benchmark, fell 3 per cent to $49.29 a barrel, taking its weekly losses to nearly 5 per cent, the first weekly drop in more than a month. Brent, the global benchmark, fell 2.4 per cent to $55.62 a barrel, ending a five-week rise that was the longest since June 2016. The National Weather Service on Friday issued hurricane and storm surge warnings for the gulf coast from eastern Louisiana to the Alabama/Florida border, including the city of New Orleans.  Oil companies on Thursday began shutting down offshore platforms in the gulf, halting 1.2m barrels per day or 71 per cent of the region’s production, according to the US Bureau of Safety and Environmental Enforcement. Nate’s expected track would take it through a region of the central gulf that holds a large number of oil and gas installations. BP and Chevron said they were shutting all the platforms they operate in the gulf, including two of the region’s largest: BP’s Thunder Horse and Chevron’s Jack/St Malo. Modern weather forecasting gives oil companies several days warning of approaching storms, allowing them time to shut production and evacuate on a measured timetable.

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