Laura Deals Minimal Blow To Crude Prices, Quick Resumption Of Gulf Production Expected

Just as it did to Louisiana, Hurricane Laura on Thursday delivered a blow to crude prices but not as severe as some analysts had predicted: Brent dipped 55 cents to settle at $45.09 per barrel, while West Texas Intermediate declined 35 cents to $43.04 per barrel.

The rapidly-diminishing storm meant that the Gulf of Mexico's 84 percent shuttered offshore crude production would quickly resume, and indeed BP said on Thursday it was already preparing to return to its company-operated facilities in the deepwater gulf to inspect for any potential storm damage.

At the same time, Exxon Mobil Corp contacted employees of its 369,000 barrels per day (bpd) refinery and chemical plant in Beaumont, Texas, and prepared a preliminary tally of damages.

In other parts of the world, the push continued to resurrect an embattled energy industry in the wake of the government-imposed coronavirus lockdowns: according to Petro-Logistics and Refinitiv Eikon data, Iraq's crude oil exports have fallen so far in August (by an estimated 100,000 bpd compared to July), suggesting that the Organization of the Petroleum Exporting Countries (OPEC) member is delivering more of its pledge to cut supply under the cartel's cutback deal.

Daniel Gerber, chief executive of Petro-Logistics, said, "Iraq is on track to record its strongest monthly compliance level this year; however, the country still needs to apply significant additional cuts to compensate for its oversupply in previous months."

Meanwhile, eyeballing opportunities in the post-Covid world on Thursday was Angola, Africa's second-biggest oil explorer, which on Thursday unveiled a 2020-2025 energy roadmap foreseeing oil discoveries of up to 57 billion barrels of crude oil and 27 trillion cubic feet of gas; the plan will involve $679 million in foreign investment and $188 million by the Angolan state.

Thursday also saw the S&P 500 and the Dow advance after U.S. Federal Reserve said it would adopt an average inflation target and restore America to full employment; additionally the financial sector was supported by Abbott Laboratories gaining approval to market a portable, rapid Covid antigen test, regarded as a step toward further containing the pandemic in advance of vaccine treatment anticipated in late 2020-early 2021.

As for the vaccines that could potentially pull crude prices out of their range-bound status, the European Union on Thursday signed a deal with AstraZeneca for at least 300 million doses of its candidate and an option for a further 100 million doses; and Novavax Inc. said it expects filing for approval of its vaccine in the U.S. in December.