I am reading this article on the Financial Times: Oil prices hit as US gulf coast faces hurricane

If the production of oil is forecast to decrease, that means the supply would decrease. Surely the price should rise, not fall?

The article says: The price of crude oil was driven down on Friday as Tropical Storm Nate was forecast to strengthen and hit the US Gulf of Mexico coast with hurricane force winds on Saturday night, and as traders anticipate disruption to refineries.

What am I missing?


1 Answer 1


Refineries need oil to produce chemical products. Therefore, it means declining demand for oil and falling prices according to demand supply principles.

The point is refineries which use oil as ingredient.


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