Fri, 27 Nov 2020

Oil prices climb amid storm-induced output cuts

Xinhua
28 Oct 2020, 07:30 GMT+10

NEW YORK, Oct. 27 (Xinhua) -- Oil prices rebounded on Tuesday, recouping some of the massive losses they suffered in the prior session, as a tropical storm threatened output in the U.S. Gulf of Mexico.

The West Texas Intermediate (WTI) for December delivery gained 1.01 U.S. dollars to settle at 39.57 dollars a barrel on the New York Mercantile Exchange, while Brent crude for December delivery increased 74 cents to close at 41.20 dollars a barrel on the London ICE Futures Exchange.

Sixteen percent of U.S. oil production in the Gulf of Mexico has already been shut down as Tropical Storm Zeta is approaching, which is lending support to oil prices, Eugen Weinberg, energy analyst at Commerzbank Research, said in a note Tuesday.

Meanwhile, analysts noted that downside risks remain on the oil market.

"Further transport restrictions are looming on the already embattled demand side," as COVID-19 infections continued to surge in some major economies, said Weinberg, adding uncertainty over additional U.S. coronavirus stimulus would also weigh on the market.

Oil prices tumbled on Monday that saw both crude benchmarks pull back more than 3 percent, as soaring COVID-19 cases sparked fears over energy demand.

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