Oil jumps as storm approaches Gulf of Mexico production hub

Brent Crude was trading 0.87% down at  $70.64.

 Oil prices rose on Friday and are on track to post big gains for the week on worries about supply disruptions as energy companies began shutting production in the Gulf of Mexico ahead of a possible hurricane forecast to hit on the weekend.

Brent Crude futures were $1.02, or 1.4%, higher at $72.09 a barrel at 1105 GMT. U.S. West Texas Intermediate (WTI) crude futures climbed $1.09, or 1.6%, to $68.51 a barrel.

For the week, Brent is on track for a rise of more than 10%, its biggest weekly jump since June 2020. WTI is headed for a weekly gain of more than 9%, which would be its strongest rise since September 2020.

“Energy traders are pushing crude prices higher in anticipation of disruptions in output in the Gulf of Mexico and on growing expectations OPEC+ might resist raising output given the recent Delta variant impact over crude demand,” Edward Moya, senior market analyst at OANDA told Reuters.

Companies started airlifting workers from Gulf of Mexico oil production platforms on Thursday and BHP and BP  said they had begun to stop production at offshore platforms as a storm brewing in the Caribbean Sea was forecast to barrel through the Gulf on the weekend.

The prospect of U.S. Gulf supply outages helped turn the market around from losses on Thursday, which had been partly spurred by output returning at a Mexican oil platform following a fatal fire.

“The market may have more immediate concerns, with a storm building in the Caribbean. It’s expected to become a powerful hurricane and potentially wreak havoc in the Gulf of Mexico and Texas early next week,” ANZ Research said in a note.

Brent Crude , RSI Stood at 51.139, the current price is trading  Above  the Moving Averages 5 & 20. So, a  Buy trade can be executed with the following target and stop-loss:

TRADE SIGNAL-Brent Crude– Buy: 71.30, TARGET:-81.30, STOP LOSS:- 66.30.

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