As the East Coast prepared for the landfall of Hurricane Matthew, crude oil futures climbed above $50 a barrel on Thursday, according to Bloomberg MarketWatch. Traders were optimistic that the potential for storm-related disruptions in several southeastern states could contribute to an overall decline in the nation’s inventory levels.
November West Texas Intermediate crude climbed 61 cents, or 1.2%, to settle at $50.44 a barrel on the New York Mercantile Exchange. That marked the WTI’s highest settlement since June 9.
On London’s ICE Futures Exchange, December Brent crude, the global benchmark, added 65 cents, or 1.3%, to end trading at $52.51 a barrel—also the highest since early June.
“For energy, the track of the storm looks to be a bigger threat to demand than supply but in the near term, it will further reduce U.S. oil supply that has fallen at a historic pace over the last 5 weeks,” said Phil Flynn, senior markets analyst at Price Futures Group. “Oil tankers are being diverted to other ports or will wait out the storm and that could delay imports by as little as four days or in some cases, it could be weeks.”
Oil prices have enjoyed a steady upward trend since last Wednesday, when OPEC cartel members reached a preliminary understanding to scale back production in order to reduce a supply glut that has depressed prices for more than two years.
OPEC said it plans to cap the group’s production between 32.5 million and 33 million barrels a day, a slight drop from 33.2 million barrels a day in August. OPEC did not decide on the quota for individual countries. The deal will not be finalized until the next official OPEC meeting in Vienna, Austria on November 30. Reuters reported late Wednesday that OPEC and non-OPEC producers plan to informally meet in Istanbul during October 8 through October 13 in order to discuss the preliminary agreement.
On the New York Mercantile Exchange, November natural gas futures added less than a cent, or 0.3%, to end trading at $3.049 per million British thermal units.