Oil steadies as storms hit production in Gulf of Mexico

Crude oil prices steadied on Monday as storms hit the Gulf of Mexico, closing over half of the region’s oil production. However, prices were capped by rising concerns about fuel demand amid the coronavirus pandemic.

Brent futures fell 0.1%, or 2 cents, at $44.33 per barrel. U.S. West Texas Intermediate crude lost 0.1%, or 2 cents, at $42.32 per barrel.

Hurricane Marco and Tropical Storm Laura hit the Caribbean and Gulf of Mexico on Sunday, forcing energy companies to remove workers from offshore platforms and close down production.

Producers shut 58% of the Gulf’s offshore oil production and 45% of natural gas supply. The region makes up for 17% of U.S. oil production and 5% of U.S. natural gas output.

The coronavirus death toll worldwide exceeded 800,000 on Saturday, with the United States, India, and Brazil reporting the most fatalities.

Also weighing on oil prices is the rise in U.S. oil and natural rig count, with energy firms adding the most oil rigs in seven months as shale producers begin operations again.

Still, the OPEC+ compliance with the agreed output cuts supported prices.