A man riding his bicycle while palm trees sway in the wind as Hurricane Zeta approaches, in Cancun, Mexico — Reuters LONDON, Oct 27 (Reuters): Oil rose on Tuesday towards $41 a barrel as oil companies shut down some US Gulf of Mexico oil output due to a hurricane, although surging coronavirus infections and rising Libyan supply limited gains.
Companies including BP, Chevron and Equinor ASA evacuated rigs, and so far producers have shut 16 per cent, or 293,656 barrels per day (bpd) of oil output due to Hurricane Zeta.
Brent crude LCOc1 was up 13 cents, or 0.3 per cent, at $40.59 a barrel by 0915 GMT US oil CLc1 gained 27 cents, or 0.7 per cent, to $38.83. Both contracts fell more than 3.0 per cent on Monday.
"Whilst Hurricane Zeta could provide a price relief under the current circumstances, it will be very brief," said Tamas Varga of oil broker PVM. "The mood is, indeed, souring."
Oil has declined because of rising coronavirus infections globally and a lack of progress on agreeing a US coronavirus relief package. Still, US House of Representatives Speaker Nancy Pelosi is hopeful a deal can be reached before the Nov. 3 election.
Another report adds from Houston, US: Energy firms and ports along the US Gulf Coast were bracing on Tuesday for another test as Hurricane Zeta, the 11th hurricane of the season, entered the Gulf of Mexico.
BP, Chevron and Equinor evacuated oil workers and Royal Dutch Shell paused drilling as winds intensified to 85 mile-per-hour (136 kph). Pipeline operator Enbridge evacuated an offshore platform and on Tuesday plans to remove workers from a Louisiana natural gas processing plant.
Some oil producers were pulling workers for at least the sixth time since June, a process made more difficult by the novel coronavirus pandemic with workers required to be tested for the virus before returning to work.
Zeta was the third named storm this month to hit Mexico's Quintana Roo state, forecasters said, setting a new record for the month. On Monday, it became the 11th hurricane of the Atlantic season, which on average has six.
A hurricane watch was issued for parts of Louisiana to the
Mississippi-Alabama border by the US National Hurricane Center (NHC). Zeta could hit the US coast on Wednesday at or near hurricane strength, the NHC said.
Energy ports from Baton Rouge to Pascagoula were operating under advisories warning of the potential for gale force winds. A Louisiana deep water oil export port said it was implementing its inclement weather plan.
Energy producers shut 16 per cent, or 293,656 barrels per day (bpd) of oil and 6.0 per cent of natural gas output, or 162.57 million cubic feet per day, according to data from the US offshore energy regulator.
US Gulf of Mexico offshore oil production accounts for about 17 per cent of total US crude oil output and 5.0 per cent of total US dry natural gas production.
In early Asia trading, US and Brent crude futures both gained a fraction after falling more than 3.0 per cent on Monday over fears of rising COVID-19 cases and increased crude supplies.
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