Brent crude oil prices rose on Wednesday, lifted by U.S. producers shutting most of their offshore output in the Gulf of Mexico ahead of Hurricane Laura and optimism over China-U.S. trade talks. But gains were capped amid renewed concern over the coronavirus pandemic, which has squeezed fuel demand, after reports from Europe and Asia of patients being re-infected with COVID-19, raising concerns about future immunity.
Brent crude oil futures added 12 cents, or 0.3%, to $45.98 a barrel by 0335 GMT, while U.S. West Texas Intermediate crude remained steady at $43.35 a barrel. Both benchmarks settled at a five-month high on Tuesday.
The U.S. energy industry on Tuesday was preparing for a major hurricane strike. Producers evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico’s offshore production – near the 90% outage that Hurricane Katrina brought 15 years ago.
Top U.S. and Chinese officials reaffirmed their commitment to a Phase 1 trade deal, which has seen China lagging on its obligations to buy American goods, potentially boosting flows between the world’s two largest oil consumers.
Still, downward pressure came from concern about demand after data showing U.S. consumer confidence has tumbled to its lowest in more than six years due to concern about coronavirus-induced job losses.