It has been months since a hurricane posed a real threat to oil rigs in the Gulf of Mexico. Now, Hurricane Ida is entering the region from the west after doing significant damage in Nicaragua.
Most hurricanes that move into the Gulf end up doing very little damage to either deep sea drilling platforms or the refineries around Houston, but traders still get nervous about the potential interruption in oil supply. According to the Financial Times, the Gulf of Mexico accounts for almost 25% of U.S. oil production.
If Ida does begin to threaten rigs and big oil companies have to pull their crews off for safety reasons, crude prices will move up again this week, at least for now.
Douglas A. McIntyre is an editor at 24/7 Wall St.