Oil prices neared $80 a barrel on Wednesday as Hurricane Florence threatened to hit the US east coast and cause disruptions to the region’s markets.
Concerns about the looming storm and expected disruptions to supply on terminal facilities in the region have led to the oil price gains.
The increase comes ahead of renewed US sanctions on Iran that will take full effect in November and are expected to sharply curtail exports by the Middle East nation.
As at Wednesday afternoon, Brent Crude, the international benchmark for crude oil, was trading at $79.5 per barrel.
US West Texas Intermediate (WTI) climbed to $70.20 per barrel, one track for the highest close this month, having opened at $67.53 on Tuesday.
In an advisory issued on its website, the National Hurricane Centre in the US said “dangerous Florence heading toward the U.S. southeast coast is expected to bring life-threatening storm surge and rainfall to portions of the Carolinas and mid-Atlantic states.”
This has prompted an evacuation order that will affect over one million people living in the coastal regions around North Carolina, South Carolina and Virginia.
The Organization of the Petroleum Exporting Countries (OPEC) Monthly Oil Market report for August showed that members of the cartel boosted total output.
Emmanuel Ibe Kachikwu, Nigeria’s minister of state for petroleum resources, has already predicted that OPEC’s decision to cap output at 1.8 million barrels per day may extend into 2019.