Wednesday 10 July 2019 3:52 pm

Oil prices rise as stormy weather hits production

Oil prices climbed higher today, passing the $65 per barrel mark for the first time in a week, as markets reacted to lower-than-expected US crude stocks and a brewing storm.

International standard Brent crude had added more than 2.7 per cent by the mid-afternoon, while WTI, the US measure, was up nearly 2.8 per cent to $59.43.

Read more: Opec agrees to extend oil supply cuts by nine months

It comes as stockpiles in US refineries fell by 8.1m barrels to 461.4m, according to data from the American Petroleum Institute. This was more than twice what analysts had predicted.

Meanwhile, storm clouds on the horizon are forcing production to stop in parts of the Gulf of Mexico. A tropical disturbance there is expected to reach storm levels today or tomorrow.

“For all the doom-mongering on the demand front, oil prices are getting a much-needed kick up the backside this morning courtesy of Mother Nature,” said Stephen Brennock, an analyst with PVM.

Several oil majors are evacuating staff from 15 offshore platforms in the Gulf, while Exxon Mobil said it is monitoring the situation.

The Gulf produces around 17 per cent of US crude.

Oil prices have slowly ticked upward since the middle of June, after weeks of decline.

Read more: Oil prices tick up as Opec signals it will keep production down in second half of the year

They are being pressured by a glut of US shale in the market, while demand has struggled due to trade uncertainties.

In January producing cartel Opec cut its production by 1.2m barrels per day in a bid to stabilise prices. Brent reached 2019 highs of around $73 in April.

Main image credit: MARCEL MOCHET/AFP/Getty Images