Drop of Oil Prices Due to the Hurricane Damages

Oil prices declined on Tuesday as an aftereffect of the Hurricane Irma as it weakened the demand as it counterbalances the restart of the refineries since the Hurricane Harvey. Despite the recovery of the refineries, the repercussion of cyclone Irma was less favorable of favorable for the oil market.

The global benchmark of Brent crude LCOc1 dropped by 35 cents to $53.49 per barrel at 08.47 GMT. On the other hand, the U.S. West Texas Intermediate (WTI) crude CLc1  declined by 30 cents at $47.77 a barrel.

The Goldman Sachs forewarned that there is a possibility for the demand to drop by 900,000 barrels per day for the month of September and 300,000 bpd in the succeeding month because of tropical cyclones.

Investors are also monitoring how the weather conditions could affect the inventories. The report from the American Petroleum Institute (API) is anticipated on Tuesday while the U.S. Department of Energy’s Energy Information Administration (EIA) will publicize the results on Wednesday.

Projections from experts show that the inventory reports of crude stocks will increase by 2.3 million barrels for the week of September 8. Furthermore, the prediction for the refined commodities supply will most likely decline. Despite the present problem in oversupply in oil reserves, oil producing nations particularly the Saudi Arabia and Venezuela and Kazakh counterparts with the probability of extending its lengthen of production output over the March 2018.