Oil prices rise after a production stoppage due to the impact of Hurricane Laura
Oil prices have risen in the markets due to the closure of US refineries in Texas and Louisiana in the face of the imminent impact of Hurricane Laura, temporarily limiting the consequences of the drop in global demand due to the coronavirus crisis. The price of West Texas futures in the United States climbed 1.7% to $ 43.35 a barrel, while Brent, the benchmark in Europe, rose 1.6% to $ 45.86 a barrel .
American producers have evacuated their facilities in the area, where half of the country's production is concentrated. In the face of the imminent impact of the hurricane, the markets fear that in the short term there will be a fuel shortage. Publication of the reserve data of the American Petroleum Institute is scheduled for today.
Another event that seems to be underpinning the rise in oil prices in the short term is the progress in the trade agreement between China and the United States, which commits both parties to boosting demand for crude. Nonetheless, OPEC expects global demand to rebound to pre-pandemic levels later this year.
Source: Admiral Markets MetaTrader 5. Brent and WTI daily charts. Data range: October 2019, to August 26, 2020. Prepared on August 26, 2020 at 10.30 a.m. Keep in mind that past results do not guarantee future returns.
As we see in the graphs above (Brent above, WTI below), since the beginning of 2020, the oil market has been affected by different events that have caused high volatility in this instrument until last April 20, which was an unprecedented situation with a contango effect. This volatility began with the escalation of tension at the beginning of the year between the United States and Iran and intensified with the global coronavirus pandemic.
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