Tropical Storm Fears Keep Oil Above $54
Fears that a tropical storm moving into the U.S. Gulf area have kept oil prices above $54 a barrel. Traders are concerned that the storm will disrupt production in the area.
It is the time of year for hurricanes and fears of such storms will likely keep concerns high for the amount of production that will occur in the U.S. Gulf area.
“The approaching hurricane season reminds us of the utter devastation that hurricane Ivan caused when it hit the Louisiana coast last year,” said energy analyst Deborah White. According to AP,
The IEA estimated that oil demand in China fell by 180,000 barrels per day in April compared with a year earlier and it forecast a sharp rise in non-OPEC supplies later this year. The Paris-based energy watchdog also predicted that OPEC’s output capacity would be 32.2 million barrels per day by the end of the year, an increase of more than 500,000 barrels from current levels, according to analysts.
The report offset already diminishing concerns about Tropical Storm Arlene, the hurricane season’s first named storm. Several producers in the region made routine evacuations of offshore platforms, though the impact on output is expected to be minimal.
“There is certainly very real concerns over what the coming storm could do to supplies as we enter the hurricane season,” commented David Thurtell, commodity strategist from the Commonwealth Bank of Australia. “I believe many players are buying so that they will not be caught short if and when supply disruptions do occur.”
Tropical storm Arlene, which is the first storm this season to be given a name, is expected to turn into a hurricane this afternoon. Alabama and Florida are now feeling its effects.