Oil rides to seven-week high on Gulf storm, tightening U.S. supply

Oil rode a tide of bullish news to its highest price in almost two months as a potential hurricane roiled the Gulf of Mexico and U.S. crude inventories dropped.

Futures advanced 4.5% to the highest settlement since May 22. The storm brewing in the Gulf could reach hurricane status before slamming ashore this weekend, according to government meteorologists. Chevron Corp., Exxon Mobil Corp. and other major oil producers are evacuating crews from offshore installations and almost one-third of Gulf crude output has been halted.

Meanwhile, reported that U.S. crude stockpiles shrank by 9.5 MMbbl last week, surpassing all 13 estimates in a Bloomberg survey. President Donald Trump vowed to increase sanctions on Iran “substantially,” adding to already simmering tensions in the Persian Gulf.

“The market is reacting to the impact of the storm and the price is getting further support from the crude oil inventory draw,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.