Oil prices finished higher Monday as investors assessed the impact of Hurricane Irma on energy demand in Florida and Hurricane Harvey’s extent of damage to oil refineries on the Gulf Coast.
October West Texas Intermediate crude CLV7, +1.20% tacked on 59 cents, or 1.2%, to settle at $48.07 a barrel on the New York Mercantile Exchange after tapping a low at $47. Global benchmark November Brent crude LCOX7, +0.02% inched up by 6 cents, or 0.1%, to finish at $53.84 a barrel on the ICE Futures Europe exchange.
Harry Tchilinguirian, global head of commodity markets at BNP Paribas, said the market was still determining the extent of the damage of Hurricane Harvey on oil refineries, while anticipating the effect of Hurricane Irma, which made landfall in the U.S. over the weekend.
In a “dramatic situation” like a hurricane, there is going to be “a lot of volatility in the numbers,” he said.
In a note Monday, however, analysts at Goldman Sachs said the negative impact on oil demand from Irma will be smaller than Harvey, which made landfall on the Texas coast on Aug. 25. That is “because Texas has twice the oil consumption per capita of Florida given the significant concentration of refining and petrochemical capacity on the U.S. Gulf Coast,” they said.
“Harvey, as a result, had a significant negative impact on refineries and ethylene crackers utilization and their crude and [natural-gas liquids] feedstock demand,” the analysts said.