By Barani Krishnan
Investing.com - Crude prices received another boost from Mother Nature on Tuesday — their third in six weeks — as Tropical Storm Zeta headed for Louisiana, triggering the shutdown of oil production facilities around the region.
Seasonal demand for gasoline has been weak since the peak summer driving season came to an end in the U.S. and coronavirus infections began a renewed spike. Global demand for crude, diesel and jet fuel have also taken a hit from a resurgence of Covid-19 caseloads in Europe, weighing broadly on energy prices.
Yet two major storms — hurricanes Sally on Sept. 16 and Delta on Oct. 9 — have helped keep crude prices above or near $40 per barrel since last month as oil production facilities in the U.S. Gulf Coast of Mexico were shut in precaution.
Now, Zeta, which is expected by the National Hurricane Center to make landfall somewhere around eastern Louisiana on Wednesday, is providing similar support.
New York-traded West Texas Intermediate, the leading indicator for U.S. crude prices, settled at $39.57 per barrel, up $1.01, or 2.6%.
London-traded Brent, the global benchmark for oil, settled at $41.61, up $1.15, or 2.8%.
Zeta is the 11th hurricane of this year’s season. A usual season has six.
Zeta is the weakest of the three storms that have hit over the past six weeks. It already slammed the Yucatán Peninsula in Mexico as a Category 1 hurricane and was forecast to bring heavy rains and a possible storm surge to Louisiana. Delta and Sally, in contrast, were category 2 hurricanes.
“Safety issues aside, these storms have been a boon to saving oil prices from getting any worse from what they are due to anemic demand caused by the Covid-19,” said John Kilduff, founding partner at Again Capital, a New York energy hedge fund.
Each evacuation of platform workers has been made more complicated this year by the coronavirus pandemic, which has required workers to be tested before returning to work each time.
— Geoffrey Smith contributed reporting to this.