Gulf of Mexico oil production curbed as region braces for the potential for rough weather, sending oil prices slightly higher in Tuesday trading. File photo by NASA/NOAA GOES Project/UPI | License Photo
NEW YORK, Aug. 30 (UPI) -- Crude oil prices ticked higher in early Tuesday trading amid weather concerns in the U.S. Gulf of Mexico and Saudi Arabian pivots toward Asia.
Crude oil prices have drifted lower in recent sessions amid doubts about any meaningful decision from major oil producers planning to meet next month in Algeria. A production freeze proposal collapsed along multilateral differences early this year and, with oil prices higher than during the second quarter, few analysts see the market ripe for action.
Crude oil prices have waxed and waned on supply and demand movements, falling steeply in 2014 as U.S. shale oil production started to peak. The U.S. Bureau of Safety and Environmental Enforcement said it was on alert for the potential for rough weather in the Gulf of Mexico, where six production platforms have been evacuated so far.
While representing only a fraction of the total production platforms in the region, BSEE said about 11 percent of the total regional oil production and 5.5 percent of the total gas production is idled because of the weather.
Crude oil prices moved up slightly at the start of trading on the supply constraints. The price for Brent crude oil was up 0.6 percent to $49.57 per barrel. West Texas Intermediate, the U.S. benchmark price for the price of oil, gained 0.8 percent from the previous close to start the day at $47.38 per barrel in New York.
Meanwhile in Riyadh, Saudi Finance Minister Ibrahim bin Abdulaziz al-Assaf met in Beijing with the board of directors of the Bank of China to explore bilateral economic opportunities.
"During the meeting, they reviewed a number of issues including the economic and development vision of the kingdom and the ways of cooperation in other investment opportunities," the official Saudi Press Agency stated.
The price for Brent spiked 2.5 percent in April last year after the Saudi Arabian Oil Co., known also as Saudi Aramco, said it was raising its price for Asian buyers in a sign of improving global demand. Later that year, however, officials in Riyadh said it would be "difficult" for current markets to return to a scenario where oil priced about $100 per barrel was normal.
Saudi Arabia this year unveiled an economic agenda dubbed Vision 2030, which aims to boost the country's non-oil revenue and generate revenue through the public listing of shares in Saudi Aramco, which could be valued at $2 trillion.
Saudi Arabia is among the members of the Organization of Petroleum Exporting Countries considering some form of intervention to stabilize the energy market. With crude oil prices holding at a level about 50 percent less than two years ago, the Saudi economy is expected to grow at an average rate of 2 percent, compared with the 5 percent growth rate in the four years ending in 2015.