Hurricane-hit Crude Oil Production International Oil Prices Ended Slightly Higher

Global oil prices rose last week (August 24, solstice28), with New York light crude futures up 1.49% and London brent up 1.58%, as offshore oil production and refineries along the gulf of Mexico suffered from the impact of the tropical storm.

Light crude for October delivery fell 7 cents, or 0.16%, to settle at $42.97 a barrel on the New York Mercantile Exchange on Aug. 28. London Brent crude for October delivery fell 4 cents, or 0.09%, to settle at $45.05 a barrel.

Tropical storms and hurricanes have shut down 85 percent of U.S. oil production capacity in the Gulf of Mexico, shutting down major refineries along the coast and costing more than a million barrels a day. However, industry insiders believe the storm activity is generally mild, providing some short-term support to oil prices and refinery profits, but is less likely to have a lasting impact on the crude market. Supply and demand in markets affected by the outbreak are key to determining long-term crude oil prices. With the outbreak continuing and demand for natural gas and crude falling, the production shock from the storm in the U.S. Gulf of Mexico is unlikely to push prices higher.

Global oil demand fell by 11m b/d in the first half of the year compared with the same period last year, according to Austria's JBC energy data.

The latest monthly reports from the International Energy Agency, the US Energy Information Administration and Opec show that oil consumption will not return to pre-epidemic levels in 2021.