Oil capped its best week since mid-June as Tropical Storm Barry gained strength, approaching refineries in Louisiana and leaving deserted offshore platforms on its path.
Futures in New York gained 4.7 percent for the week after prices held above $60 a barrel for a third day. Forecast to make landfall as
a hurricane early Saturday, Barry has already curbed about half of US Gulf of Mexico production. Coupled with rising tensions between the UK and Iran, as well as a steep drop in American crude stockpiles, the storm helped offset concerns over weakening demand.
“After quite a few weeks of very bearish petroleum numbers the last two weeks have actually been supportive,” said Kyle Cooper, a consultant at Ion Energy Group in Houston. “It’s a bullish backdrop. I don’t think we’re going to run away here, but the mid-$50s to
low $60s seems like a reasonable level.” Still, the longer-term outlook looks less promising. The Organization of Petroleum Exporting Countries (Opec) warned of a glut in 2020 as US shale production surges. The International Energy Agency (IEA) said there had been a surprise pile-up of inventories in the first half of this year, and that Opec may need to cut output to the lowest in 17 years to prevent another overhang.