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Brandon O’Brien
Oil prices rose more than 3% on Tuesday morning as Norway oil and gas workers continue to strike, natural disaster hits the Gulf of Mexico, and President Trump returns to office.
Brent Crude and U.S. West Texas Intermediate futures were up nearly $1.30 on Tuesday. This has a lot to do with an oil worker strike in Norway, which ended up cutting the country’s total output by almost 330,000 barrels of oil per day since the strike started. According to the Norwegian Oil and Gas Association, this is nearly 8% of their total capacity. Norway normally pumps out nearly 4 million barrels of oil per day, making it a major global energy supplier. If this strike lengthens, investors can expect energy prices to increase steadily over the next few weeks.
In addition to the strike in Norway, production disruption in inevitable in the Gulf of Mexico, as another hurricane is currently developing. Energy companies are scrambling to evacuate offshore oil platforms as Hurricane Delta has now been categorized as a Category 2 hurricane and could possibly be even worse by the time it reaches the Gulf. Chevron has wasted no time, as they have evacuated all in person personnel from the facilities based in and around the Gulf.
Finally, not only did the energy sector benefit immensely from President Trump returning to office, but the entire stock market received a huge boost, in addition to the expectation of another stimulus package. When Trump had first fallen ill with the virus, oil prices plunged, as uncertainty in the entire market skyrocketed as Americans prepare for the election. U.S. citizens are still holding onto hope for a new economic relief package as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke on Munday, in hopes of agreeing to some sort of legislation.
The energy sector has experienced an unbelievable amount of volatility over these past few days, with the craziness occurring all over the world. Investors should expect nothing else as we get closer and closer to the election, as oil prices could swing from one day to the next.
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