By Francis Ogwo
There was a bullish development in prices of global crude for the week as it recorded gains after tropical storm hit Gulf of Mexico.
This was as a result of a tropical storm in the Gulf of Mexico, which, according to reports, forced major U.S oil producers to shut down their oil rigs, but the upsurge in crude oil prices were capped by growing concerns about the falling demand for gasoline.
Reports say U.S. West Texas Intermediate gained 0.51%, to trade at $37.52 per barrel, and Brent crude prices were up 0.25% to trade at $39.93 per barrel.
Both crude oil contracts ended lower in the previous week, its second consecutive week of decline.
Analysts say, Tropical storm Sally picked up its strength in the Gulf of Mexico, west of Florida, and was turning to become a category 2 hurricane. The hurricane storm is disrupting oil supplies for the second time in less than four weeks, after hurricane Storm Laura swept through the Gulf coast.
This implies that, crude oil prices surge higher when oil supplies are shut down; however, with the global exponential growth in COVID-19 caseloads, and oil demand falling momentarily, oil traders remain relatively cautious.
Experts have opined that the hurricane impact is getting offset by yet another gloomy short-term view that is likely limiting OPEC’s attempt to stabilize markets.
