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Oil hovers above 6-week peak on Mexico Gulf storm preparations

Oil hovers above 6-week peak on Mexico Gulf storm preparations

Mubasher: Oil prices surpassed a six-week peak on Thursday as rigs in the Gulf of Mexico were evacuated ahead of a brewing storm, Reuters reported.

In addition, the ongoing tensions in the Middle East were further fuelled after an incident with a British oil carrier in the region.

By 8:09 am GMT, US Nymex crude futures rose by 0.68% to $60.84 per barrel (pb), slightly above $60.83 pb, the highest since 23 May, while global benchmark Brent futures jumped by 0.91% to $67.62 pb, having touched earlier $67.39 pb, their highest since 30 May.

US major producers on Wednesday slashed around a third of Gulf of Mexico crude production in preparation for what could be one of the first major storms of the Atlantic hurricane season, with fifteen platforms and four rigs evacuated.

Moreover, the Energy Information Administration (EIA) reported a drop of 9.5 million barrels in US crude stockpiles during the week to 5 July, lending support to oil prices.

“There is nothing like an early start to the hurricane season to support oil prices, but looking under the hood of the EIA data, it paints an even rosier picture for US oil markets,” Bangkok-based Vanguard Markets managing partner Stephen Innes was quoted by Reuters.

Elsewhere, tensions have been on the rise in the Middle East amidst attacks on oil carriers and the shootdown of a US drone by Iran last month.

This came after, US President Donald Trump’s withdrawal from a 2015 multilateral nuclear accord with Tehran under which its nuclear activity was capped in exchange for sanctions relief.

A US defence official on Thursday said that five boats believed to belong to Iranian Revolutionary Guards approached a UK oil carrier and asked them to stop in Iranian waters, but withdrew a British warship warned them over radio.