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Oil prices mixed on storm-driven output cuts, rising COVID-19 cases

Published 25/08/2020, 03:10
© Reuters. General view of oil tanks and the Bayway Refinery of Phillips 66 in Linden
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By Jessica Jaganathan

SINGAPORE (Reuters) - Crude oil prices were mixed on Tuesday as traders weighed massive production cuts in the U.S. Gulf Coast from Tropical Storms Marco and Laura against rising coronavirus cases in Asia and Europe.

Brent crude oil futures (LCOc1) added 9 cents, or 0.2%, to $45.22 a barrel by 0419 GMT, while U.S. West Texas Intermediate crude (CLc1) was down 9 cents, or 0.2%, at $42.53 a barrel.

"A jump last week in the U.S. rig count and mixed data on COVID-19 infections are having a muted negative effect on oil this week, thanks in part to the possible disruption from two separate hurricanes moving into the U.S. Gulf Coast region," said Stephen Innes, chief global markets strategist at AxiCorp.

Energy companies moved to cut production at U.S. Gulf Coast oil refineries on Monday after shutting 82% of the area's offshore crude oil output as the rare double-storm assault on key U.S. oil regions threatens to bring days of heavy rains and strong winds this week.

Producers have shut more than 1.5 million barrels per day of Gulf Coast offshore oil production, nearly 14% of the nation's total output.

A top U.S. infectious diseases expert warned on Monday that rushing out vaccines could undermine trials of other promising candidates, following a boost to markets after U.S. regulators authorised the use of blood plasma from recovered COVID-19 patients as a treatment option.

Europe is also seeing a rise in coronavirus cases while the first documented case of human re-infection with COVID-19 was reported with a man in Hong Kong catching the virus again some four months after first being infected.

Elsewhere, top U.S. and Chinese officials, who spoke by phone on Monday, see progress on resolving issues over the Phase 1 trade deal agreed in January and both sides are committed to the success of the agreement, the U.S. Trade Representative's Office said.

© Reuters. General view of oil tanks and the Bayway Refinery of Phillips 66 in Linden

Meanwhile U.S. crude oil stockpiles likely fell for a fifth straight week, while refined product inventories also decreased last week, a preliminary Reuters poll showed on Monday.

 

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