Oil prices rise as Hurricane Delta approaches U.S. Gulf of Mexico

By Sonali Paul
MELBOURNE, Oct 8 (Reuters) - Oil prices rose on Thursday as
oil workers evacuated rigs in the U.S. Gulf of Mexico ahead of
Hurricane Delta, though fuel demand concerns persisted on fading
chances for an economic stimulus deal in the United States, the
world's biggest oil consumer.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose
13 cents, or 0.3%, to $40.08 a barrel at 0215 GMT, after falling
1.8% on Wednesday.
Brent crude LCOc1 futures rose 20 cents, or 0.5%, to
$42.19 a barrel, after falling 1.6% on Wednesday.
With Hurricane Delta forecast to intensify into a Category 3
storm with winds of up to 120 miles per hour (193 km per hour),
oil producers have evacuated 183 offshore facilities and halted
nearly 1.5 million barrels per day (bpd) of oil output.

The Gulf of Mexico produced 1.65 million bpd in July,
according to the U.S. government. The region, which accounts for
17% of U.S. crude output, has been hit by several storms over
the past few months, each of which only briefly dented oil
output. Hopes for a further pick-up in U.S. fuel demand faded as
White House officials reiterated on Wednesday that "stimulus
negotiations are off" a day after President Donald Trump halted
talks on a broad relief package. The possibility that there will be no upcoming economic
support measures comes as government data on Wednesday showed
demand for oil at U.S. refineries is 13.2% lower than a year
earlier, underscoring the plunge in fuel demand from the
disruptions caused by the coronavirus pandemic. EIA/S
"A piecemeal approach to U.S. fiscal stimulus is unlikely to
alter a deteriorating demand outlook for oil," ANZ commodities
analyst Vivek Dhar said in a note.
The Energy Information Administration data on Wednesday did
show U.S. gasoline stocks fell more than expected last week to
their lowest since November, and distillate stockpiles also
declined. However, crude oil supplies rose by 501,000 barrels,
as production and imports climbed. "As global oil demand falters, there is increasing pressure
on global oil supply to adjust lower to keep prices supported,"
Dhar said, forecasting Brent would average $41 a barrel in the
current quarter.