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UPDATE 6-Oil rises above $43 on supply losses, U.S. stimulus hopes

Thu, 8th Oct 2020 05:47

* U.S. crude inventories rise, fuel inventories dip

* Oil platforms shut in U.S. Gulf as Hurricane Delta
strengthens

* Norway strike could shut giant Sverdrup oilfield on Oct 14
(New throughout, updates prices, market activity and comments;
new byline, changes dateline, previous LONDON)

By Laura Sanicola

NEW YORK, Oct 8 (Reuters) - Oil was up slightly on Thursday,
backing off a session high of more than $43 a barrel reached on
support from output shutdowns ahead of a storm in the U.S. Gulf
of Mexico and the prospect of more supply losses in Norway.

Oil and gas workers have withdrawn from offshore U.S. Gulf
production facilities as Hurricane Delta was forecast to
intensify into a powerful, Category 3 storm. Nearly 1.5 million
barrels of daily output was halted.

Brent crude was up 86 cents, or 2%, to $42.85 barrel
at 11:15 EDT (1515 GMT), after falling 1.6% on Wednesday. U.S.
West Texas Intermediate (WTI) crude added 78 cents, or
2%, to $40.73 after falling 1.8% on Wednesday.

"Hurricane Delta is a crude oil supply event, and with all
of this Gulf of Mexico production offline, we will probably lose
more than 5 million barrels of crude oil due to the storm," said
Andrew Lipow, President of Lipow Oil Associates in Houston,
Texas.

"However, the storm is having a limited impact on gasoline
and diesel demand," he added.

Oil also gained support from the prospect of more production
outages in the North Sea because of a workers' strike. The major
Johan Sverdrup field will have to shut unless the strike ends by
Oct. 14.

The production losses offset concerns about demand, rising
coronavirus cases and rising U.S. crude inventories.

Renewed optimism over some U.S. coronavirus relief aid also
supported the market.

After shutting down talks over a larger U.S. stimulus deal,
President Donald Trump wrote on Twitter that Congress should
pass funding for airlines, small businesses and stimulus checks
for individuals, fuelling hopes for relief.

The Organization of the Petroleum Exporting Countries faces
a new challenge from rising output in Libya, an OPEC member
exempted from cutting output.

On Thursday, OPEC Secretary General Mohammad Barkindo said
the worst was over for the oil market.
(Additional reporting by Alex Lawler. Sonali Paul, Shu Zhang
and Ahmad Ghaddar; editing by David Gregorio, Jason Neely and
Mark Potter)

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