U.S. West Texas Intermediate oil futures are trading higher early Friday and in a position to post a gain for the week despite the release of a second report calling for a supply glut in 2020. The price action suggests that supply worries are outweighing demand concerns.
Affecting the supply side are a tropical storm in the Gulf of Mexico and heightened tensions in the Middle East. Also helping to generate some upside momentum is another large drawdown in U.S. stockpiles.
Oil Rigs Evacuated Ahead of Storm
Fifteen production platforms and four rigs were evacuated in the north central Gulf of Mexico, according to a U.S. regulator.
According to the latest reports, oil companies in the Gulf of Mexico had cut more than 1 million barrels per day (bpd) of output, or 53% of the region’s production, due to Tropical Storm Barry which could make landfall Saturday on the Louisiana coast.
Iran Creates Disturbance with Britain
Three Iranian vessels tried to block the passage of a British ship run by BP through the Strait of Hormuz, the British government said. They withdrew after warnings from a British warship. Although prices rose in response to the news, apparently the event was anticipated after Iran warned Britain would face “consequences” over the seizure of an Iranian oil tanker.
U.S. Government Reports Another Big Draw
On Wednesday, the U.S. Energy Information Administration (EIA) reported crude stocks fell…