LONDON. — Oil prices dropped yesterday on concerns that Hurricane Irma’s pounding of heavily populated areas of Florida could dent oil demand in the world’s top oil-consuming nation. Losses were capped by weekend talks between Saudi Arabia’s energy minister and counterparts over a possible extension to a pact to cut global oil supplies beyond next March. Brent crude oil futures for November delivery LCOc1 were down 66 cents at $53,12 a barrel while benchmark U.S. West Texas Intermediate crude CLc1 declined by 33 cents to $47,15.
Irma knocked out power to nearly 5,8 million Florida homes and businesses on Sunday after millions were told to evacuate ahead of the storm.
“We believe that Irma will have a negative impact on oil demand but not on oil production or processing,” Goldman Sachs analysts said in a note.
Irma hit Florida on Sunday morning as a dangerous Category 4 hurricane. It gradually lost strength and weakened to a tropical storm by yesterday morning as it headed toward Georgia.
It comes on the heels of Hurricane Harvey, which struck the US oil hub of Texas two weeks ago, knocking out a quarter of the nation’s refineries, many of which are now restarting operations.
The two hurricanes are expected to inflict a “bearish shock” on oil balances in September, denting global demand by 900 000 barrels per day (bpd) and supply by about 300 000 bpd, Goldman said.
The longer-term focus, however, was on a possible extension to the 15-month production pact between members of the Organisation of the Petroleum Exporting Countries and non-OPEC producers including Russia. The deal aims to curb a glut that has weighed on crude prices for more than three years. — Reuters.