Oil traders should not hope for a hurricane

The start of the hurricane season brought new drivers to the oil market. Amid the 82% stoppage of oil production capacity in the Gulf of Mexico due to Tropical Storm Marco and Hurricane Laura oil price on the London and New York stock exchanges reached new highs since the beginning of March.

Will quotations be able to use this factor for moderate growth or its support will be short-term and oil price will return to the previous range? Sergey Drozdov, Analyst of Finam Group, answered the question of Fortrader magazine.

- At the moment, in addition to the positive conjuncture in world financial markets, oil quotations are supported by the situation in the Gulf of Mexico, where oil producers reduced more than 80% of production on the eve of Hurricane Laura gaining strength. If Hurricane Laura hits the coast in the next few days, the price of Brent futures contract may attempt to rewrite the high of early August - $46.26.

Brent oil price

However, it is worth considering the fact that the annual hurricane story is purely speculative in nature and is not one of the long-term drivers of the price of "black gold. And we should also not forget that if the hurricane does not cause significant damage to the region's production or weakens and changes its direction at all, oil prices will immediately move downward and level out the storm premium, returning to the previous range.