Investing.com - Oil prices plunged on Friday, snapping a multi-week bull run amid renewed oversupply concerns, with investor attention shifting to a potential disruption to crude production and refining capacity in the Gulf of Mexico as Tropical Storm Nate bears down on the region.
The Bureau of Safety and Environmental Enforcement (BSEE) estimated that approximately 1.2 million barrels per day (bpd) of crude oil production had been shut-in by operators ahead of the storm, which was expected to become a hurricane by Sunday.
The U.S. Gulf is home to around 17% of the country’s crude oil production, while more than 45% of U.S. oil refining capacity is along the Gulf Coast.
U.S. West Texas Intermediate (WTI) crude futures sank $1.50, or around 3%, to end at $49.29 a barrel by close of trade. It touched its lowest level since Sept. 13 at $49.10 earlier in the session.
For the week, WTI prices slumped about 5%, after posting gains in each of the last four weeks.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., tumbled $1.38, or roughly 2.5%, to settle at $55.62 a barrel, its weakest in nearly three weeks.
The global benchmark ended the week with a loss of approximately 3.5%, snapping a five-week win streak.
Prices were supported earlier in the week as traders weighed the likelihood that OPEC-led production cuts will be extended through next year in the wake of a meeting between Saudi King Salman and Russian President Vladimir Putin in Moscow.
The original deal, struck nearly a year ago between OPEC and 10 other non-OPEC countries led by Russia, was to cut production by 1.8 million barrels a day for six months. The agreement was extended in May of this year for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.
The cartel's next meeting is set for November 30 in Vienna.
Elsewhere, gasoline futures declined 5.2 cents, or 3.3%, to end at $1.558 on Friday. It closed down around 3% for the week.
Heating oil slumped 4.2 cents, or 2.4%, at $1.743 a gallon, ending roughly 3.8% lower for the week.
Natural gas futures lost 6.0 cents, or 2%, to settle at $2.863 per million British thermal units. It saw a weekly drop of nearly 5%.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday to further weigh what the impact of recent storm activity was on supply and demand.
The reports come out one day later than usual due to the U.S. Columbus Day holiday on Monday.
Oil traders will also focus on monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to assess global oil supply and demand levels.
The data will give traders a better picture of whether a global rebalancing is taking place in the oil market.
The market is also waiting on President Donald Trump’s decision on Thursday on whether or not to certify Iran’s compliance with the international nuclear deal. The Persian nation is an OPEC member and key Middle Eastern oil producer.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Wednesday, October 11
The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Thursday, October 12
The International Energy Agency will release its monthly report on global oil supply and demand.
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
A weekly report on natural gas supplies in storage is also on the agenda.
Friday, October 13
Baker Hughes will release weekly data on the U.S. oil rig count.