Hurricane Isaias rattles markets, oil prices surge sharply

Oil prices are surging on global markets today. The rise comes as Hurricane Isaias heads towards the United States. While meteorologists are warning of heavy rain and flash floods, markets fear the storm will likely hit oil and gas production facilities. Some production has already been shut down as a precaution. According to the International Energy Agency, 2,05 million barrels of oil per day were produced in the US Gulf of Mexico in September, representing about 15 percent of the country's total output.

At 09:15 CEST, North Sea Brent crude was up 3,79 percent at 104 USD per barrel, while US light crude WTI was up 3,42 percent at 91,30 USD per barrel at the same time.

Authorities in Florida and Alabama have declared states of emergency in dozens of counties. Some oil production in the Gulf of Mexico has already been temporarily halted. About 25 percent of production in the area was suspended on Wednesday, equivalent to around 522.000 barrels of oil per day. Eight of the 371 staffed oil platforms were also evacuated.

Isaias is heading towards a coastline with a long history of destructive hurricanes. Hurricane Camille killed more than 250 people in 1969 after making landfall near the town of Waveland, Mississippi. Hurricane Katrina devastated parts of Mississippi, flooded New Orleans and killed nearly 1,400 people in 2005. In 2018, Hurricane Michael devastated the area around Panama City, Florida.

Because of the expected storm, the National Shrimp Festival in Gulf Shores, Alabama, was cancelled. Organisers say it attracted about 325.000 people last year. Authorities in Gulf Shores and nearby Orange Beach urged residents in low-lying areas to consider evacuating voluntarily.

Alabama Governor Kay Ivey declared a state of emergency in 40 counties. In Florida, the measure covers 25 counties in the Panhandle and Big Bend areas. In Pensacola, energy companies are preparing for possible power outages, and the city has provided residents with sand to protect their homes from flooding. Mayor D.C. Reeves also urged residents to check on elderly neighbours and others who might need help.

Oil prices in dollars per barrel (about 159 litres)