Crude oil weekly review: Hurricane disrupts production Oil prices hit the biggest weekly gain since June last year

Over the past week, oil prices have enjoyed their biggest weekly gains since June, with cloth oil up 10.26% to close at $71.67 a barrel U.S. oil up 11.01% to close at $68.67 as a major hurricane is forecast to hit early next week producers shut 59% of their Gulf of Mexico capacity on Friday. Providing upward momentum for oil prices; At the same time as market fears over COVID-19 receded, the weak dollar also helped make dollar-denominated global commodities more attractive.

This week is mostly profitable

The hurricane has halted production of offshore platforms

Oil companies in the Gulf of Mexico began airlifting workers to production platforms on Thursday, while BHP Billiton BP said they had stopped production at offshore platforms because of a brewing storm in the Caribbean that is expected to hit the Gulf over the weekend.

Offshore Wells in the Gulf of Mexico account for 17 percent of U.S. crude oil production 5 percent of dry natural gas production. More than 45 per cent of US refining capacity is located along the Gulf Coast. The prospect of supply disruptions in the U.S. Gulf region helped markets recover Thursday's losses, in part due to the resumption of production after a deadly fire at an oil platform in Mexico.

The NATIONAL Hurricane Center says IDA could approach major hurricane strength as it approaches the northern Gulf coast. Hurricane IDA is passing over the Cayman Islands, hurricane warnings have been issued for parts of the northern Gulf Coast.

Anz Research noted in a note that markets may have more immediate concerns as storms develop in the Caribbean. It is expected to become a powerful hurricane that could wreak havoc in the Gulf of Mexico Texas early next week.

Ubs: Oil to $75 / BBL by year-end

There are renewed fears that pandemic restrictions could damp economic recovery oil demand. Oil prices look set to remain volatile, but the uptrend is likely to resume. The normalisation of the global economy remains in place, which should boost oil demand.

We expect Brent crude to rise to $75 a barrel by December. Moreover, the recent Opec + agreement to increase production by 400,000 b/d per month is set in stone. The report said the Saudi energy minister had made it clear that Opec + could delay cancel plans to increase production if necessary.

Us GDP growth in the second quarter reflected stronger business investment exports

Us economic growth in the second quarter was revised up slightly, reflecting stronger business investment exports than initially estimated. The Commerce Department reported Thursday that inflation-adjusted GROSS domestic product grew at an annualized rate of 6.6% in the second quarter, compared with a preliminary estimate of 6.5% growth. Consumer spending rose 11.9 percent. The report also includes second-quarter corporate profits. Pre-tax corporate profits rose 9.2 per cent on an annualised basis 43.4 per cent year-on-year.

While the data showed the economy maintained strong growth toward the end of the first half, supply labor constraints remain headwinds. Recent data have shown a slowdown in retail sales residential construction, while the rapid spread of the Delta strain has added to uncertainty about the outlook for demand.

This week is mainly negative

The number of Americans filing for unemployment benefits rose slightly last week

The number of Americans filing for unemployment benefits rose for the first time in five weeks as the Labour market's path to a full recovery remained bumpy.

New claims for unemployment benefits reached 353,000 in the week ended August 21, up 4,000 the previous week, labor Department data showed On Thursday. The median estimate in a Bloomberg survey was for 350,000. Continuing claims fell slightly to 2.9 million in the week ended August 14.

The rise in initial claims likely reflects weekly volatility amid rising demand for labor. The recent outbreak of the Delta strain poses a risk, but so far there is little evidence that health concerns are causing companies to lay off workers.

Kabul bombing hawkish Fed views

A number of non-voting FOMC members made hawkish comments on monetary policy, urging the Fed to start scaling back its asset purchases. Treasurys were little changed the dollar rose.

MichaelO 'rourke, chief market strategist at Jonestrading in Greenwich, Connecticut, said the rapid decline could be an accumulation of morning news, including uncertainty over the Kabul bombing comments a number of fed officials ahead of fed chairman Jerome Powell's speech on Friday.

While a sustained economic rebound high inflation make policy normalization more likely, the fast-spreading Delta strain could prove a bigger drag on the economy than some expect.

Separately, a fire at an offshore drilling rig in Mexico on Sunday cut production by more than 400,000 b/d, state oil company Pemex had recovered 71,000 b/d as of Tuesday, with another 110,000 b/d expected this week.

Afternoon looking forward to

Keep an eye on OPEC+ next week

OPEC its Allies are expected to press ahead with plans to boost oil production when they meet next week, as oil prices rebound a steep drop this month.

The Saudi-led Russian-led coalition is gradually resuming large-scale production suspended during the pandemic, a survey suggests it is likely to approve a planned increase in production next month when it meets on September 1. Several OPEC+ delegates privately made the same prediction.

EdMorse, head of commodities research at citigroup, said uncertainty surrounding the world economic recovery had largely disappeared there was ample evidence that the bottom in oil prices was temporary overdone, with OPEC+ likely to stick with plans to increase production if the recovery continues.

OPEC+ production has recovered about 45 percent after an unprecedented cut last spring. Under a plan led by Saudi oil minister AbdulazizbinSalman, OPEC+ will gradually increase production by 400,000 b/d per month until the end of 2022.

Seventeen of the 22 traders, analysts refiners surveyed expect no change after Sept. 1, implying a planned increase in October.

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Source: China Energy Net