An excess of natural gas is being flared or burned off at a flare stack at the refinery at Tula on November 21 2013. Mexico's oil refining sector, plagued for years by high costs, chronic underinvestment and generous government fuel subsidies, was given a shake-up in October. This dismantled Pemex, the state-run oil and gas monopoly. It also ended decades of self-reliance, potentially opening up the doors to foreign oil companies. REUTERS/Henry Romero
Oil prices rose on Tuesday after five people were killed in a fire at an offshore Mexican oil rig. The incident also reduced the country's production by almost a quarter.
Mexico's state-owned oil firm projected that the 125 affected wells would be operational within days.
Sunnier sentiments about the future oil demand, particularly from China, was another factor that boosted oil prices Tuesday, as the Delta variant of the global economic crisis ravages the world.
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Oil prices rose on Tuesday after five people were killed in a fire at an offshore Mexican oil rig. The incident also reduced the country's daily production by almost a quarter.
Pemex, Mexico’s state-owned oil company said Monday that approximately 420,000 barrels per hour of oil production - roughly 0.5% of global average output - had been shut down. However, it projected that the 125 affected wells would be back online within days.
West Texas Intermediate oil futures rose as high as 3.3% Tuesday to $67.80 a barrel. Even sharper was the two-day rally. WTI rose as high as 8.8% from Friday's closing prices.
Sunnier sentiments about the future oil demand, particularly from China, were another factor that boosted oil prices Tuesday, even though the Delta variant is still spreading rapidly.
According to Commerzbank analysts in Germany, "It seems like the concerns about demand which had still predominated last Week have lost much of its scare factor," the Financial Times reported. "One important part of this is the apparent success that Chinese authorities have in fighting the spread the Delta variant."
On Tuesday, iron ore and agricultural commodities saw a surge, buoyed in part by more optimistic sentiment about Chinese iron demand, extreme heat killing American soy, wheat, and corn, as well as the optimism surrounding Chinese iron.
