Oil: Rising with the storms – HSBC
The price of Brent crude rallied in September, rising by 9.9% over the month and the upward trend in the first week of the month was aided by the ease of concerns over hurricane Harvey and oil refining demand rising once again, explains the research team at HSBC.
Key Quotes
“The rally stalled on 8 September as hurricane Irma approached the US east coast. The market feared that Irma would hit oil demand that was only just recovering from the damage caused by Harvey, and oil prices subsequently fell.”
“The rally got back underway on 12 September, boosted by several reports including from OPEC and the IEA highlighting the robustness of global demand. Also, August data showed the first dip in OPEC output since March. This upward trend went unchallenged as the recovery in oil demand continued. On 26 September, the price of Brent crude breached USD59/bbl and reached its highest level since July 2015. This followed an escalation of tensions between Turkey and Iraqi Kurdistan over an independence referendum, with Turkey’s President Erdogan threatening to ‘close the tap’ and prevent the supply of Kurdish oil. The price of Brent crude retraced slightly off this high to end the month at USD58/bbl.”