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Hazloc Heaters
Hazloc Heaters

Oil Near $43 With Hurricane Laura Unable to Break Market Slumber

By Ann Koh and Alex Longley

(Bloomberg) Oil stayed in its recent tight range after Hurricane Laura swept the U.S. energy heartland without appearing to inflict major damage on key infrastructure.Futures in New York were steady near $43 a barrel on Friday, with average trading volumes in August plunging to multiyear lows. Laura, one of the most powerful hurricanes to ever hit Louisiana, knocked out power to hundreds of thousands of people and caused widespread damage, but ports and crude facilities — including the largest U.S. refinery — in southeast Texas likely avoided the worst of it.

Traders are now returning their focus to the recovery in oil demand that has appeared to stall this month. Crude prices are moving in a narrow range of about $4 in August and a gauge of market volatility remains near its lowest level since January.

WTI has traded in a tight range throughout August

“With little oil infrastructure damage reported so far, and with shut-in production likely to return in the coming days, it looks as though oil will remain trading in this fairly narrow range that we’ve become accustomed to,” said Warren Patterson, head of commodities strategy at ING Bank NV.

  • West Texas Intermediate for October lost 1 cent to $43.03 a barrel at 10:46 a.m. in London. Brent for the same month, which expires Friday, rose 2 cents to $45.11
    • Average trading volumes for WTI and Brent in August so far are the lowest since 2015 and 2014 respectively, according to exchange data compiled by Bloomberg

As the pace of the global energy demand recovery takes centerstage, there are shaky signs emerging across the globe. About half of India’s trucking fleet is still idled, leading to a bleak outlook for diesel consumption, while sales of motor fuels in the U.K. and a recovery in European air travel are flat-lining.

The slowdown is resulting in weaker margins for producing fuels, reducing the incentive for refiners to purchase more crude. In Europe, profit from turning crude into diesel is at its narrowest since June, while that for gasoline in America is the lowest since April.

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