WTI crude oil quotes are increasing during the trading session on Tuesday and are traded at $ 42.53 per barrel. Prices are supported by concerns over energy supply interruptions due to tropical storms in the Gulf of Mexico.
Recall that more than 15% of the total production capacity in the United States is located in the Gulf of Mexico region, while approximately half of the American refineries are located on the coast. This means that even a temporary closure of oil facilities could affect the overall supply. Earlier, on the eve of storms in the region, more than half of the oil production enterprises were closed. Tropical storm Laura is forecast to hit the coast in Louisiana or Texas on Wednesday and could turn into a major hurricane. Meanwhile, tropical storm Marco, which approached the Louisiana coast in the afternoon of yesterday, has already caused flooding in the region.
Despite the local upward dynamics of oil, the impact of natural disasters on quotes will not last long. If storm "Laura" does not turn into a hurricane, on Thursday market participants will again switch to the previous fundamental background, which last Friday provoked the first impressive correction in a long time. We are talking about significant oil reserves in the United States, a drop in demand due to suppressed economic activity, as well as the maximum increase in the number of oil terminals in the United States since January 2020. In particular, the report of the oilfield services company Baker Hughes published on Friday showed that in the period from August 15 to 21, the number of active drilling rigs for oil production in the United States increased by 11 units and amounted to 183 units. Traders believe that if the upward trend in the number of active rigs continues, the subsequent increase in supply from US producers may create another obstacle to balancing the global hydrocarbon market. With that said, even amid the threat from the tropical storm season, the potential for price reductions still exists.
WTI SellLimit 42.90 TP 41.00 SL 43.50
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