On Tuesday (29 Aug), the U.S. government agency published Consumer Confidence data that fell from 114 to 106 MoM, hinting at lower economic outlook in the world’s largest economy, which implied for lower oil demand and dollars.
The US oil price responded with an increase of 1% over $81 per barrel while the US dollar grew weaker as DXY Futures dropped from 104.2 to 103.5.
Meanwhile, the brewing category 3 hurricane (wind speed at 179 kmph) in the Gulf of Mexico, Idalia is hitting US’s Florida state. This triggered all emergency measures as most of oil production in the Gulf is on hold, while companies such as Chevron (CVX.N) and Kinder Morgan evacuated their staffs.
The Short-Term Energy Outlook (SETO) from US Energy Information Administration (EIA) published in mid-July forecasted the temporary loss of offshore crude oil production from hurricanes would be about 1.5 million barrel per day, and would increase monthly gasoline retail price by 25 to 30 cent per gallon as a base case predicted on September. The effect will persist and slowly decline to zero until the start of next year.
The weekly report of US crude oil stocks on 25 Aug showed a draw of 11.5 million barrels according to American Petroleum Institute. Meanwhile, the average draw is 3.3 million barrels, according to Reuters polled analysts, hinting that the drop last week may not pose a major supply risk.
