In a week where the U.S. became the world largest oil producer and saw U.S. oil demand hit a record high on a 4-week average, the market must continue to focus on the risks from Mother Nature.  

Oil prices pulled back yesterday from resistance as the market reduced the risk of a tropical depression in the Gulf of Mexico as well as downgrading Hurricane Florence that has hit near Wilmington, North Carolina as a Category 1 Hurricane. NPR reported that although downgraded to a Category 1 storm, the hurricane has grown larger and slowed its march inland — factors likely to contribute to potentially catastrophic flooding. More than 320,000 power outages were reported across North Carolina and nearly 4,400 in South Carolina.

While the Gulf of Mexico (GOM) may have been granted a reprieve in the short term, a very active Atlantic Ocean has more storms that can impact oil operations not only in the Gulf but even in Europe in the North Sea.

A tropical wave Invest 95L in the Gulf of Mexico continues to fall apart. Some models earlier in the week had the storm turning into a tropical storm that could have hit near  Galveston Texas. Yet, the National Hurricane Center(NHC) lowered its chances for development from 50% overnight to 30%. The NHC now says that the wave only has a short period of time to develop into a tropical depression before it moves inland over northeastern Mexico and southern Texas later today.

But that does not mean that the GOM is in the clear. Tropical storm Isaac, a former Hurricane, could be headed into the GOM next week. It has weakened a bit because of Caribbean Sea sheer, but top forecaster Michael Schlacter warns that its future impacts to North America remain alive.

Then you have Tropical Storm Helene that was downgraded to a tropical storm but could be heading towards the North Sea and that could impact the Brent Market. Tropical Storm Joyce also looks like it might have ambitions on Europe. Than you have a real possibility of future classifications of “KIRK” & “LESLIE” possible this coming week according to Schacter.