Oil Mixed Over Storm Production Cuts and Fuel Demand Recovery Worries
-Oil was mixed on Tuesday morning in Asia, with production cuts in the U.S. Gulf Coast and the world’s first case of COVID-19 reinfection in Hong Kong putting a damper on investor sentiment.
Producers moved to cut production at Gulf Coast oil refineries on Monday, after the double-whammy of hurricane Marco and tropical storm Laura threatened the area, forcing the shutdown of 1.5 million barrels per day (bpd), or 82%, of the area’s offshore crude oil output.
“A jump last week in the U.S. rig count and mixed data on COVID-19 infections are having a muted negative effect on oil this week, thanks in part to the possible disruption from two separate hurricanes moving into the U.S. Gulf Coast region,” Stephen Innes, chief global markets strategist at AxiCorp, told Reuters.
Investors now await the American Petroleum Institute (API)’s prediction of crude oil supply, due later in the day.
Meanwhile, researchers at the University of Hong Kong (HKU) said that a man in his 30s was reinfected with COVID-19 four months after his initial infection. The world’s first case of reinfection has spurred fears over the fragile fuel demand recovery, as worries over patients’ shorter-than-expected immunity after recovering from the virus increase.