That being said, this is a temporary situation as opposed to some of the more prolonged shut-ins that we have seen in the Middle East. The reality is that undamaged facilities can restart after they are inspected and standard safety checks are done, while damaged installations could take longer.

This sets up a situation where the weekend could be very important because we need to know how much damage has been done to those rigs in the Gulf. That is probably a story that will develop Saturday evening, Sunday morning, possibly Monday.

The storm arrives against a supportive inventory backdrop. The EIA’s October 7 petroleum report showed commercial crude stocks falling 3.2 million barrels to 424.1 million in the week ending October 2. Crude exports have reached 4.765 million barrels per day, while refinery inputs have increased to 16.48 million. This all predates the storm, so this could look like a wild release next week.

Lost offshore production will reduce supply, potentially supporting WTI prices. The fact that the technical analysis lines up with that is something that is not lost on me. This is not to say that crude oil has to go straight up in the air, but clearly a lot of things are lining up at the same time to be supportive.