Hurricane Ida has been downgraded to a Category ‘1′ hurricane as it heads towards the Gulf of Mexico.
Floods and mudslides killed 124 people in El Salvador over the weekend – and the US state of Louisiana has been bracing itself for the arrival of the storm.
US oil companies have shut down some production and evacuated workers from the Gulf ahead of the storm.
Oil rose more than $1 to above $78 a barrel, recouping some of the previous session’s near 3% loss, on fears the powerful hurricane would cut U.S. oil and gas supplies and also lifted by the falling dollar.
“Reports of tropical storms potentially impacting operations in the Gulf of Mexico would be supportive in the near term, but investors generally focus on economic and inventory data for direction,” Australia & New Zealand Bank said in a research note today.
Fast-moving Hurricane Ida led oil companies to begin evacuating workers on Sunday and prompted the nation’s only offshore oil port to stop taking foreign crude from tankers.
Despite the threat Ida poses to U.S. oil supplies, analysts said oil prices are unlikely to stage a strong rally even if some capacity is shut in.
