The price for a barrel of crude oil closed higher on Friday and rose more than 10 percent on a weekly basis, while Tropical storm Ida moved towards the US Gulf Coast.
Tropical storm Ida led to a hurricane watch in New Orleans and a declaration of emergency for the state of Louisiana. The storm is now crossing the Caribbean and is expected to reach Cuba today. The risk of the storm increasing in intensity could support prices until the end of next week. Power companies have already started moving crews from platforms in the Gulf of Mexico.
Production restrictions due to the tropical storm allowed WTI, the US benchmark, to reduce its discount against Brent. The gap had risen to over $ 4 per barrel during Thursday’s session, the highest since May 2020, but has fallen to $ 3.49.
Although only 5 per cent of American natural gas is produced in the Gulf of Mexico, Mexico the market in any case is tight.
An October futures contract for a barrel of crude oil closed Friday +2.0 percent, or $ 1.32, higher to $ 68.74 on the New York Mercantile Exchange.