Market Close: Sep 14 Mixed
Sep 14th, 2018 by loren
Oil futures ended higher Friday, with the U.S. benchmark building on its gain for the week as the U.S. has reportedly ratcheted up pressure on countries to comply with upcoming sanctions on Iranian oil. Traders also continued to watch for any impact on the energy market from Hurricane Florence and looked to potential new U.S. tariffs on Chinese goods, which could hurt demand for oil.
Manisha Singh, assistant Secretary of State for Economic and Business Affairs, told lawmakers at a hearing Thursday that the country is prepared to take the “strongest action” against countries not complying with Iran sanctions, including cutting purchases of Iranian oil to zero, according to a news reports. Oil traders are concerned about the Trump administration’s target of zero Iranian oil exports, said Phil Flynn, senior market analyst at Price Futures Group.
Separate reports Friday, meanwhile, said President Donald Trump still wants to impose more tariffs on China despite recent attempts to restart talks between the U.S. and China, which is the world’s second-largest oil consumer. Trump is pushing for more China tariffs because he believes that would push China over the edge, said Flynn.
And as “far as Florence is concerned, we know that there will be demand destruction in the short term, but a surge in demand in a few weeks when [the region] starts to rebuild,” he said. The Gulf of Mexico has to be watched as Isaac, currently a tropical depression, could be an issue next week for energy operations in the Gulf, Flynn said. Isaac is expected to move over the eastern and central Caribbean Sea over the next few days. Hurricane Florence was downgraded to Category 1 storm as it hit the Carolinas Friday. Even with the downgrade, Florence was expected to cause catastrophic flooding over portions of North Carolina and South Carolina, according to the National Hurricane Center.
The storm has the potential to cause disruptions to the flow of fuel through key pipelines in the region. “The Northeast is heavily dependent on the Colonial Pipeline and Plantation Pipeline for refined products supplies, both of which run through the Carolinas,” according to a report from S&P Global Platts issued Friday morning. Both pipelines were operating normally Thursday, it said. “No U.S. offshore or onshore oil production facilities or refineries are currently in the path of Florence,” they added.
Fuel-price tracker GasBuddy reported that more than half of the gas stations in Wilmington, NC were out of fuel.