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Tropical storm Barry to hit US Gulf, affecting oil output

12 July 2019

(National Hurricane Centre: Forecast Path of Barry)

The tropical storm Barry is expected to hit the US Gulf coast this weekend (see chart above). The storm is forecast to strengthen to a Category 1 hurricane, according to National Hurricane Center. It could bring a storm surge and heavy rainfall from Louisiana to the upper Texas coast (Reuters). Refiners in the Gulf of Mexico have cut oil production by more than 1mil bbl/day ahead of the storm, accounting for half of output in the region. Brent prices jumped more than 4% on Wednesday to USD 67/bbl. Decreased oil supplies may pose an upside risk to bunker prices. The storm may push up the water level of Mississippi River to the highest in 90 years (Bloomberg). The Southwest Pass channel at the mouth of the river was shut Wednesday, halting traffic of vessels, according to American Commercial Barge Line (Bloomberg). The upcoming hurricane is likely to impact SM exports from the US as well (see page 3).

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