Oil prices steady as hurricane makes Gulf Coast landfall

Oil prices were broadly stable on Thursday as a massive hurricane in the Gulf of Mexico made landfall in the heart of the US oil industry, forcing oil rigs and refineries to shut down.

Brent crude LCOc1 futures for October, which expires on Friday, rose $0.06, or 0.1%, to $45.70 a barrel by 0942 GMT. The more active November Brent contract LCOc2 was virtually flat at $46.17 per barrel.

US West Texas Intermediate (WTI) crude CLc1 futures fell $0.08, or 0.2%, to $43.31 a barrel.

Hurricane Laura made landfall early on Thursday in southwestern Louisiana in a category 4 storm, one of the most powerful to hit the state, with forecasters warning it could push a wall of water 40 miles inland from the sea.

Oil producers on Tuesday had shut 1.56 million barrels per day (bpd) of crude output, or 84% of the Gulf of Mexico’s production, evacuating 310 offshore facilities.

At the same time, refiners that convert nearly 2.33 million bpd of crude oil into fuel, and account for about 12% of US processing, halted operations.

“The response of the oil price has been remarkably cool so far,” Commerzbank said. Oil prices also shrugged off US crude inventory declines and signs that gasoline demand in the world’s biggest oil consumer was improving.

Crude oil stockpiles fell last week as exports soared the most in 18 months and refineries boosted production to the highest rate since March, Energy Information Administration data showed on Wednesday. Gasoline stocks also fell.

“It appears that the gasoline inventory reduction was due first and foremost to increased demand – gasoline demand rose to a six-month high of around 9.2 million bpd,” Commerzbank said.