Oil prices settle higher as more production shut ahead of hurricane

[HOUSTON] Oil prices settled higher on Friday (Oct 9) as Hurricane Isaias churned towards the northern Gulf of Mexico and oil companies shut more than 70 per cent of crude production in US waters.

Earlier in the session, crude prices were down as US President Donald Trump said talks with Iran to end the war in the Middle East had been “productive”.

Trump also teased an upcoming, undisclosed announcement on diesel and said he was considering suspending the federal petrol tax.

Brent crude futures settled at US$104.72, up 44 cents or 0.42 per cent.

US West Texas Intermediate (WTI) crude futures finished at US$91.85 a barrel, up US$0.36, or 0.39 per cent.

Plans by China, the world’s top oil importer, to resume refined fuel exports after a brief halt during its Golden Week holiday, also weighed on the market, Reuters reported citing sources.

On a weekly basis, Brent and WTI prices are set to rise.

Trump’s Iran pledge along with China’s resumption of product exports were moving prices lower, PVM Oil Associates analyst Tamas Varga said.

Prices have been volatile as threats to shipping in the Persian Gulf and the Strait of Hormuz, which carried shipments equal to about 20 per cent of global oil and fuel before the war, have increased.

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Trump said Washington was having “productive discussions” with Iran and said no attack was planned before the Nov 3 midterm congressional elections after media reports that he was considering an attack before then.

Iran’s Tasnim news agency reported the same day that Foreign Minister Abbas Araqchi said Teheran is reviewing the US response to its proposal that would reopen the Strait of Hormuz within seven days.

The US is still pressuring Iran economically, imposing sanctions targeting individuals, networks and 17 vessels for transporting Iranian crude, oil products and petrochemicals.

The Iran war and the conflict between Russia and Ukraine have disrupted supplies of refined fuels such as petrol, jet fuel and especially diesel fuel.

The oil market is also contending with Hurricane Isaias in the Gulf of Mexico, where producers had shut in about 1.3 million barrels per day, or 62.9 per cent, of current oil production, according to the US Marine Minerals Administration. REUTERS