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Expert says Hurricane Matthew may lead to oil storages shutdown, influence markets

October 07, 18:55 UTC+3 MOSCOW
Hurricanes are a systemic factor in positive movements of the oil market but their input to price hikes is controversial, the expert believes
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© AP Photo/Chris O'Meara

MOSCOW, October 7. /TASS/. Hurricane Matthew barreling across the Caribbean may led to shutdown of 33 mln bbl capacity oil storages in the United States and cause disruption of tanker supplies in the Caribbean Sea, analyst of Russia’s Vygon Consulting Ekaterina Kolbikova told TASS on Friday.

Hurricanes are a systemic factor in positive movements of the oil market but their input to price hikes is controversial, she said.

"Oil prices growth may also be related, for example, to the crude oil production outlook lowering by Saudi Arabia according to Barclays estimate or to expectations of positive result of OPEC and non-OPEC countries meeting in Istanbul. Such cataclysms have a rather short-term effect, which is more likely to be associated with concerns of oil traders regarding the market offer contraction than with the actual production decline. This is evident from the most devastating hurricanes occurred in the Gulf of Mexico in August - September 2005 - Katrina and Rita hurricanes," the expert said.

Brent oil currently fells 1.35% to $51.88 per barrel on the London’s ICE.

Arrival expectations of Hurricane Matthew exert more significant local effect in the context of retail gasoline prices, Kolbikova said. Gasoline prices hiked in Florida by 4.3 cents to $2.2 per gallon because of evacuation and many gas stations ran out of fuel.

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