Commodity Market: US Crude Oil rebounds as tropical storms approach Gulf of Mexico causing output shutdown

Futures on US West Texas Intermediate Crude Oil rebounded on Monday as tropical storms descended upon the Caribbean and were nearing the Gulf of Mexico, causing the shutdown of over half of its oil output.

In addition, oil prices were supported by news that US health authorities approved the use of blood plasma from recovered patients to treat COVID-19.

Hurricane Marco and Tropical Storm Laura hit Puerto Rico and the Dominican Republic on Sunday, which led to energy companies pulling employees from offshore platforms and shutting down production. As a result, 58% of the Mexican Gulf’s offshore oil production and 45% of natural gas output were shut down.

“Crude prices rose as double trouble in the Atlantic could lead to huge disruptions with oil operations in the Gulf of Mexico,” Edward Moya, senior market analyst at OANDA, said.

“Oil’s gains, however, are likely to be muted as virus uncertainty continues to weigh on the crude demand outlook,” he added.

Over the past weekend, US President Trump praised an authorization by the US Food and Drug Administration (FDA) of a COVID-19 treatment, which utilizes blood plasma from recovered patients.

As of 9:01 GMT on Monday WTI Crude Oil Futures were gaining 0.71% to trade at $42.57 per barrel, while moving within a daily range of $42.26-$42.68. WTI Crude Futures rose 1.54% in July, which marked their third straight month of gains. US Oil has risen another 5.28% so far in August.

Brent Oil Futures were gaining 0.77% on the day to trade at $44.60 per barrel, while moving within a daily range of $44.19-$44.66. Brent Oil Futures rose 4.86% in July, which marked their fourth consecutive month of advance. UK Oil has risen another 2.32% so far in August.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $42.23
R1 – $42.97
R2 – $43.68
R3 – $44.42
R4 – $45.17

S1 – $41.52
S2 – $40.78
S3 – $40.07
S4 – $39.37

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $44.31
R1 – $45.01
R2 – $45.75
R3 – $46.45
R4 – $47.14

S1 – $43.57
S2 – $42.87
S3 – $42.13
S4 – $41.38