Oil price slide eases as tropical cyclone looms over Gulf of Mexico

Shell, Chevron, and Norway’s Equinor have all begun evacuating staff from offshore facilities as the threat of a potential Tropical Cyclone System 9 intensifies as it moves toward the Gulf coast, where the brewing storm could turn into a hurricane by Wednesday. 

Earlier on Monday, Chevron completed the evacuation of nonessential personnel from the Gulf of Mexico facilities, including Anchor, Big Foot, Blind Faith, Jack, Petronius, and Tahiti platforms.

Shell said on Sunday that it was monitoring the storm track for potential impact on its assets and operations in the Gulf of Mexico, and was preparing to shut in production at two platforms–Stones and Appomattox. Shell has also evacuated non-essential personnel from its Mars Corridor assets as a precautionary measure. 

Equinor has evacuated non-essential staff from its Titan platform. 

Tropical Storm and Hurricane Watches have been issued for Cuba and parts of Mexico, with the National Hurricane Center (NHC) warning that the tropical cyclone system, which was near western Cuba on Monday, is expected to intensify over the next 72 hours. 

As of noon on Wednesday (ET), the NHC said there was a 90% chance this storm would develop over the next two days, with a Harris County meteorologist stating that it will likely escalate into a Category 4 hurricane as it moves across the GoM’s warmer waters. 

Oil prices on Monday were responding more to European economic data than to the potential disruption of oil supply from the Gulf of Mexico or intensifying conflict developments in the Middle East. 

At 4:13 p.m. ET on Monday, Brent crude was trading down 0.59% at $74.05, while the U.S. crude benchmark, WTI, was trading down 0.47% at $70.53.