Crude oil futures settled higher on Tuesday, as the refinery activity slowly resumed on the Gulf Coast, following the disruptions caused by Hurricane
Crude oil futures settled higher on Tuesday, as the refinery activity slowly resumed on the Gulf Coast, following the disruptions caused by Hurricane Harvey last week. Oil prices rose sharply on Tuesday and on Wednesday morning as traders are concerned of a new Hurricane that developing in the South Atlantic and may cause to a drop in demand for crude and gasoline in the area.
According to Commerzbank – About 2 million barrels a day, or 11% of U.S. refining capacity, remained offline on Monday.
Andy Lipow, president of Lipow Oil Associates said: “The largest U.S. refineries at Port Arthur, however, are not expected to return to normal capacity for at least four weeks.”
Irma – a new hurricane builds up on Tuesday into a Category 5 hurricane, the most powerful storm on the Saffir-Simpson scale, adding fear that the storm could change direction into U.S. oil and gas platforms in the Gulf.
Olivier Jacob, founder of energy consultant Petromatrix GmbH in Zug, Switzerland said: “The expected path [of Hurricane Irma] has shifted considerably west over the last two days and can still change over the next two days, we cannot yet rule out a move further west with a Louisiana risk.”
The 4H intraday chart has formed the “Falling wedge pattern” which has broken out the trend line at $47.30.
As per our technical analysis, the first level of the target has been completed and the next move is toward $49-$50 level. Currently, prices are likely to retest $48.37. A break below $48 will shift into a bearish momentum.