Hurricane Delta is Driving the Oil and Gas Market Wild

What's Happening with Oil and Gas in North America's Southern Region
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Hurricane Delta is expected to make landfall on Friday as a Category 2 hurricane. While this is significantly better than some of the hurricanes that the area around Louisiana has been faced with in recent periods, it’s still far worse than what anyone had hoped for.

In preparation for the storm Gulf of Mexico producers have shut in a total of 1.7 million barrels of crude oil per day, approximately 92% of the output. This has led to an increase in oil stocks. In fact, stocks reached the highest they’ve been in over a month with New York futures increasing 3.1%.

Strikes in Norway have threatened output in the region, which has also helped to improve the situation for stock prices more locally. With the storm coming there’s definitely more to expect when it comes to the oil market and the amount of oil that will continue to be brought in.

It appears that oil prices are being held close to $40 a barrel but this will also be dependent upon stimulus talks currently being held in Washington. With President Trump calling for a series of small bills that will aid specific industries and people within the country and Democrats including House Speaker Pelosi calling for a large, all-encompassing package, it’s unclear what could happen to the oil industry.

Experts and commodities strategists say that if the President holds firm and Pelosi holds just as firm it could be difficult, if not impossible for any stimulus package to be approved. As a result, there’s no telling what could happen with the oil market, though it does look like the market is falling.

The oil market has already shown that there is no more need for crude oil with signals that they will return a large supply. Because of this, it’s possible that the OPEC will choose to delay the output hike or to spread it out over several months.

Because of the decrease in driving in the United States fuel is being produced at a pace not seen since the 2008 financial crisis. Drivers in Western Europe are likewise remaining in their homes and as a result fuel demand is driving trading down. This is the lowest season price seen in a very long time and with the huge refining capacity, huge inventory surplus and low demand, things aren’t looking good for the oil industry. It’s not likely that prices will recover anytime soon.

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