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UPDATE 6-Oil gains on storm-hit U.S. output and COVID-19 treatment hopes

Mon, 24th Aug 2020 04:21

* Storms shut 58% of U.S. Gulf of Mexico oil output

* Trump considers fast-tracking COVID-19 vaccine - FT

* U.S. drillers add rigs for the first time since March
(Updates prices, adds WHO's comment)

By Bozorgmehr Sharafedin

LONDON, Aug 24 (Reuters) - Crude oil prices rose on Monday
as storms closed in on the Gulf of Mexico, shutting more than
half its oil production, and on signs of progress in development
of a COVID-19 treatment.

Brent crude was up 32 cents, or 0.7%, at $44.67 a
barrel by 1351 GMT. U.S. West Texas Intermediate crude
rose 8 cents, or 0.2%, to $42.42.

"Prices are taking their cues from Mother Nature this
morning as two storms bear down on the Gulf of Mexico. Half of
the region's production has been shut down, though gains will be
limited by the threat of a second prolonged COVID wave," said
Stephen Brennock of oil broker PVM.

Energy companies shut more than 1 million barrels per day
(bpd) of offshore crude oil production in the U.S. Gulf of
Mexico because of the twin threat from Hurricane Marco and
Tropical Storm Laura. Workers have been evacuated from more than
100 production platforms.

"While there is a focus on oil production at the moment, we
will need to keep an eye on refining activity, which is
vulnerable to flooding. The U.S. Gulf is a key refining hub,"
said Warren Patterson, ING's head of commodities strategy.

Motiva Enterprises may shut the largest crude oil
refinery in the United States for the bad weather later this
week, according to sources.

Also supporting prices was a report by the Financial Times
that U.S. President Donald Trump is considering fast-tracking an
experimental COVID-19 vaccine being developed by AstraZeneca
and Oxford University.

On Sunday Trump hailed FDA authorisation of a coronavirus
treatment that uses blood plasma from recovered patients, a day
after he accused the agency of impeding the rollout of vaccines
and therapeutics for political reasons.

The World Health Organization, however, was cautious about
endorsing the treatment, citing "low quality" evidence that it
works.

Oil price gains were kept in check by an increase in the
U.S. oil and natural rig count for the first time since March,
with the addition of the most oil rigs in seven months as shale
producers resume drilling.

(Reporting by Bozorgmehr Sharafedin in London
Additional reporting by Jessica Jaganathan in Singapore
Editing by David Goodman and David Evans and Kirsten Donovan)

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