Both US WTI (West Texas Intermediate) and Brent crude oil futures’ prices regained grounds on Thursday and the UK crude futures settled down above $43 a barrel, mostly backed by an entire shutdown of oil production in the US Gulf of Mexico ahead of Hurricane Delta, a category 3 storm, while a likely supply cut from the OPEC-kingpin Saudi alongside other OPEC member countries appeared to have feathered the crude oil futures’ prices further.
Aside from that, a workers’ union strike in the Norwegian Gulf over an additional payoff had led to the shutdown of at least six major offshore oil drilling rigs thus far, supporting the crude oil futures’ prices.
Notably, after falling as much as 1.5 per cent in the previous session, crude oil markets reversed course on midday US trading hour after a Dow Jones report had revealed that Saudi Arabia had been brewing off an option to phase out a planned production rise in early-2021.
Prospect of production outage in Norway, Dow Jones report drive oil futures higher
Aside from that, industry analysts suggested that the Dow Jones report on a possible ward-off of Saudi’s course of action to propping up oil productions as early as by January 2021, had been a major market mover on Thursday, while a workers’ union strike in the North Sea alongside a storm in the Mexican Gulf of US which is expected to slash US crude output roughly by 5 million barrels per day, had been backing crude oil futures’ prices.
Citing statistics, on the day’s commodity market closing bell, UK crude futures’ prices wrapped up the day 3.2 per cent higher to $43.34 after falling as much as 1.6 per cent in the previous session, while the US West Texas Intermediate crude oil futures’ prices gained 3.1 per cent to $41.19 per barrel after faltering 1.8 per cent on Wednesday.
Meanwhile, expressing an out-and-out optimism over a likely reversal of a slated output hike by the OPEC+ nation including the Kingdom of Saudi Arabia, an analyst at Price Futures Group in Chicago, Phil Flynn said, “If true, the Saudis’ decision rewards the cheaters in OPEC while acknowledging the demand challenges that are still here.
This potential extension of the cuts is definitely a positive for the markets and maybe provides the seasonal bottom that is happening anyway”.