Oil prices jumped on Friday, putting them on course for a big week of gains, as energy companies began shutting down output in the Gulf of Mexico ahead of a potential hurricane expected to arrive over the weekend. WTI crude futures in the United States rose 16 cents, or 0.2 percent, to $67.58 a barrel at 0111 GMT, reversing a 1.4 percent drop on Thursday.
WTI is expected to jump by more than 8% this week, the most weekly gain since early February. After losing 1.6 percent on Thursday, Brent crude futures climbed 16 cents, or 0.2 percent, to $71.23 a barrel. Brent is expected to soar more than 9% this week, the largest weekly gain since June 2020, mostly to relief that China has contained an outbreak of the Delta type. On Thursday, companies began airlifting personnel from Gulf of Mexico Oil production platforms.
While BHP and BP confirmed they had begun to shut down production at offshore platforms as a storm formed in the Caribbean Sea. The storm was expected to hit the Gulf on the weekend. Offshore wells in the Gulf of Mexico account for 17% of crude Oil production and 5% of dry natural gas output in the United States. Along the Gulf Coast, around 45 percent of total refining capacity in the United States is located.
The likelihood of US Gulf production disruptions helped the market recover from Thursday’s losses, which were fueled in part by the restart of operations at a Mexican Oil platform following a deadly fire. On Friday, as U.S. Federal Reserve Chairman Jerome Powell delivers a highly anticipated speech, analysts expect dollar movements to be a key role. Markets anticipate that he will provide some insight into his intentions for slowing bond purchases in the fourth quarter.