Crude oil prices moved in a narrow range on Thursday as a hurricane in the Gulf of Mexico raced towards the US oil industry, which has forced oil rigs and refineries to shut down production. Brent crude futures – the global benchmark for crude oil – quoted at $45.57-45.87 per barrel, and were last seen trading unchanged from their previous close at $45.64, having started the day mildly lower at $45.70 per barrel. US benchmark West Texas Intermediate (WTI) hovered within a range of $43.18-43.50 per barrel.
The Intercontinental Exchange (ICE)’s Brent futures are considered a benchmark for global oil markets, besides the New York Mercantile Exchange (Nymex)’s WTI crude futures.
“Crude is rangebound as support from supply disruption in the Gulf of Mexico is countered by concerns about the economic impact of a major hurricane moving towards the US mainland. The US EIA (Energy Information Administration) report noted a bigger than expected decline in US crude stocks but this was offset by marginal rise in US crude production,” said Ravindra Rao, VP-head commodity research at Kotak Securities.
The threat from Hurricane Laura has pushed the market higher this week, but the storm is not expected to affect supplies much because oil and product inventories remain high due to the impact of the coronavirus pandemic on oil demand.
Meanwhile, the dollar index – which gauges the greenback against six currencies – was last seen trading flat, having declined as much as 0.24 per cent earlier on Thursday.
“Crude may continue to remain rangebound unless there is more clarity on storm impact but general bias may be on the upside,” Mr Rao added.
At Wednesday’s close, Brent crude futures are down 30.85 per cent so far this year. In April, the contract had hit a 21-year low of $15.98 per barrel as the COVID-19-induced lockdowns hampered global demand.
India is the world’s third largest importer and consumer of crude oil. (Also Read: India’s Crude Oil Imports Hit Over 5-Year Low In June)