Crude oil futures ended a week of ups and downs with modest gains as a halt to U.S. offshore production due to Hurricane Francine offset concerns about the longer-term demand outlook, underscored by OPEC, the EIA and the Paris-based IEA, which all cut their demand estimates this week.
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U.S. government data shows the storm has halted production of 732,000 barrels of oil a day, or 42% of output in the Gulf of Mexico. But it said on Friday that production from undamaged plants would resume immediately.
“These cuts are it is expected to be short and in the broader context, it is unlikely to cause any major changes to the oil balance given the importance of shale gas production, which accounts for the bulk of U.S. production,” Ritterbusch said, according to Dow Jones.
Traders “can come back on Monday and everything will be fine, refineries will be running at 100%, everyone will be back on the platform, oil will be back, gasoline will be flowing out of refineries – and the market can potentially retreat exponentially“said Robert Yawger of Mizuho, Reuters reported.
Nymex (CL1:COM) crude oil futures for October delivery ended on Friday -0.4% to $68.65/bbl, while November Brent crude (CO1:COM) closed Friday -0.5% to $71.61/bbl; WTI crude oil is up 1.4% this week, while Brent crude oil closed the week up 0.7%.
RBOB gasoline futures (XB1:COM) also posted a small gain this week after four straight weeks of losses, with the Nymex October near-month future up 1.8% at $1.9302/gal.
Analysts say U.S. drivers could see Gasoline prices fall below $3/gallon for the first time in more than three years next month, just before the November elections.
The national average price of regular gasoline on Friday was $3.23/gal, down $0.21 from a month earlier and $0.62 from a year ago, the data showed. data from AAA.
The average price should fall below $3 a gallon by the end of October, or maybe even earlier, as the summer travel season winds down and retailers start selling cheaper winter fuel in the coming weeks, according to Patrick De Haan of GasBuddy.com, quoted by Reuters.
Wells Fargo Investment Institute research shows that U.S. presidential approval ratings are inversely related to gas prices. So falling prices should help Democrats this election cycle, according to the theory.
Energy (NYSEARCA:XLE) was the only sector to post negative results this week among the 11 S&P sectors, with the Energy Select Sector SPDR Fund ETF ending the week in the red. -0.5%.
Top 20 Energy & Natural Resources Gainers in the Last 5 Days: Nuclear Nanoenergy (NNE) +117.5%Nuclear power plant (NPP) +38.7%Coeur Mining (CDE) +37.9%Silver Cats (CAT) +34.3%New Gold (NGD) +33%First Majestic Silver (AG) +32.4%Silver Endeavour (EXK) +29.4%Silver-crest Metals (SILV) +28.9%EOS Energy Enterprises (EOSE) +25.8%Hecla Mining (HL) +25.1%MAG Silver (MAG) +23.6%ASP isotopes (ASPI) +23%NovaGold (NG) Resources +22.5%Enofix (ENVX) +22%Mesabi Foundation (MSB) +21.4%SSR Mining (SSRM) +21.2%Silver Metals Corporation (SVM) +21.2%Equinox Gold (EQX) +21.1%Aris Mining (ARMN) +20.2%Solaris Resources (SLSR) +19.7%.
Top 5 Energy & Natural Resources Downers Over the Past 5 Days: KLX Energy Services (KLXE) -19.4%Metanex (MeOH) -11.1%Green Plains (GPRE) -9%Net Power (NPWR) -8.3%Gran Tierra Energy (GTE) -7.7%.
