Oil falls ahead of hurricane but posts weekly gain as trade tension eases

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Oil falls ahead of hurricane but posts weekly gain as trade tension eases

On Friday, the 30th of August 2019, both US and UK crude posted a havoc-scale slump ahead of a Category 4 hurricane strengthening closer to the coast of Florida that would likely to make landfall on Monday (September 2nd) evening, nonetheless, both US and UK crude had posted their biggest weekly gain in more than a month and a half over renewed optimism following an ease of Sino-US trade warfare.

On Friday’s (August 30th) market closure, UK crude curbed 1.1 per cent to settle down at $60.43 per barrel, while US West Texas Intermediate Future nosedive 2.8 per cent to $55.10 a barrel. Aside from that, UK crude dropped 7.3 per cent in August, while West Texas Intermediate Crude future price posted a monthly decline of 6 per cent despite a havoc-scale drop in US crude inventory over concerns of crude oil demands amid a global-scale slowdown.

However, Brent crude and US crude scored a weekly gain of 1.8% and 1.7% respectively for the week that ended on August 30th over optimisms that trade tensions between Beijing and Washington were moderating. On top of that, US crude output would likely to falter following landfall of Hurricane Dorian, which was gaining strength on Saturday (August 31st) and creeping closer to Florida’s coast, raising risks of heavy downpour for a prolonged period, strong wind and a catastrophic storm which could disrupt crude oil supply chain for weeks.

Nonetheless, during preparation of the report, Hurricane Dorian, bolstering further had changed its course and was targeting Georgia and Carolina, while referring to a mass-scale disruption of crude oil supply chain following Hurricane Dorian, a partner at Again Capital in New York, John Kilduff said, “The latest modelling has Hurricane Dorian avoiding the Gulf of Mexico, while raking the entire state of Florida, turning it into a demand destruction event for the energy market rather than a supply disruption event. ”