HOUSTON (Reuters) – Hurricane Delta raked across the Gulf of Mexico, halting most of the region’s offshore oil output on Thursday after energy companies shut-in wells, pulled staff from offshore platforms and began securing coastal processing plants.

The storm was about 370 miles (595 km) south of Cameron, Louisiana, and grinding toward the Louisiana coast at 13 miles per hour (21 km per hour). Its tropical storm-force winds extend up to 125 miles from the storm’s center, the National Hurricane Center said.

Delta is expected to intensify further over the Gulf’s warm waters and become a major hurricane with winds of 115 miles per hour (185 kph) before landfall in southwest Louisiana by Friday evening.

Oil producers withdrew workers from 279 offshore facilities and moved 15 drilling rigs away from Delta’s winds. They have shut 1.69 million barrels per day of oil, or 92% of the region’s offshore oil, and 1.67 billion cubic feet per day, or nearly 62% of its natural gas output.

Energy prices rose on the shut-ins and prospect for a new U.S. economic stimulus. U.S. crude oil futures were up 3% at $41.21, natural gas futures and gasoline futures both rose 2.6%. Natural gas futures reversed course after suffering losses.

“It is going to be a large, powerful storm,” said Weatherbell Analytics meteorologist Joe Bastardi. Delta will land just east of Cameron, Louisiana, an area still suffering the impact of Hurricane Laura’s 150 mph winds.

Total SA

also began shutting a small oil-processing unit at its Port Arthur, Texas, refinery, people familiar with plant operation said. Cameron LNG closed its natural gas processing plant ahead of the storm’s arrival.

Offshore producers including Royal Dutch Shell

, BP

, Chevron

and Occidental Petroleum

have pulled workers from production platforms to quarters onshore.

The unusually high number of

FILE PHOTO: the sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. Picture taken November 24, 2019.REUTERS/Angus Mordant

NEW YORK (Reuters) – Oil settled above $43 a barrel on Thursday on support from output shutdowns ahead of a storm in the U.S. Gulf of Mexico and the possibility of supply cuts from Saudi Arabia and Norway.

Markets rose sharply at noon on a Dow Jones report that Saudi Arabia is considering reversing course over OPEC’s planned production increase early next year.

Brent crude settled up $1.35, or 3.2% to $43.34, after falling 1.6% on Wednesday. U.S. West Texas Intermediate (WTI) crude added $1.24 cents, or 3.1%, to $41.19 after falling 1.8% on Wednesday.

Oil also gained support from the prospect of more production outages in the North Sea because of a workers’ strike. Oil firms and labor officials said they will meet with a state-appointed mediator on Friday in an attempt both sides hope will bring an end to a strike that threatens to cut Norway’s oil and gas output by some 25%.

The Organization of the Petroleum Exporting Countries has been challenged by rising output in Libya, an OPEC member exempted from cutting output, as well as an increase in coronavirus cases in many areas of the world.

“If true, the Saudis’ decision rewards the cheaters in OPEC while acknowledging the demand challenges that are still here,” said Phil Flynn, analyst at Price Futures Group in Chicago.

“This potential extension of the cuts is definitely a positive for the markets and maybe provides the seasonal bottom that is happening anyway,” he said.

The market has also drawn support from Hurricane Delta, which is forecast to intensify into a powerful, Category 3 storm in the

Workers remove a sunshade in preparation for the arrival of Hurricane Delta, in Puerto Morelos, Quintana Roo state, Mexico on October 6, 2020.

Elizabeth Ruiz | AFP | Getty Images

Hurricane Delta began its march through prime U.S. offshore oil-producing areas in the U.S. Gulf of Mexico on Thursday as energy companies moved drilling rigs and pulled workers off platforms.

The storm, expected to intensify over the Gulf’s warm waters to a Category 3 hurricane with winds of 115 miles per hour (185 kmh), has halted 80% of the region’s offshore oil and nearly 50% of its natural gas output.

Offshore producers including Royal Dutch Shell, BP, Chevron and Occidental Petroleum pulled workers from platforms to safer quarters onshore.

The unusually high number of storms coupled with pandemic safety precautions has made this year a costly and difficult one for offshore producers.

Onshore oil and gas processing plants and energy ports from Port Arthur, Texas, to New Orleans also were battening down under tropical storm wind advisories. Louisiana Offshore Oil Port, the sole deepwater port on the Gulf of Mexico, halted seaborne exports and imports.

Delta was steaming at 17 mph over the Gulf after scraping across Mexico’s Yucatan peninsula and battering its resort areas. Louisiana sought and received a federal disaster declaration ahead of the storm’s arrival.

On the U.S. Gulf Coast, Shell began preparing three refineries in Convent, Geismar and Norco, Louisiana, for Delta’s arrival. Further west, other refineries were still under maintenance in the wake of prior hurricanes.

U.S. natural gas futures gained over 3% on Wednesday on the well closings and forecasts for larger-than-expected demand over the next two weeks. More than half a dozen liquefied natural gas (LNG) tankers were also waiting to enter U.S. export plants off the Louisiana coast.

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MELBOURNE – Oil prices rose on Thursday as oil workers evacuated rigs in the U.S. Gulf of Mexico ahead of Hurricane Delta, though fuel demand concerns persisted on fading chances for an economic stimulus deal in the United States, the world’s biggest oil consumer.

U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 13 cents, or 0.3%, to $40.08 a barrel at 0215 GMT, after falling 1.8% on Wednesday.

Brent crude LCOc1 futures rose 20 cents, or 0.5%, to $42.19 a barrel, after falling 1.6% on Wednesday.

$215M IN BP OIL SPILL MONEY TO RESTORE LOUISIANA MARSHES

With Hurricane Delta forecast to intensify into a Category 3 storm with winds of up to 120 miles per hour (193 km per hour), oil producers have evacuated 183 offshore facilities and halted nearly 1.5 million barrels per day (bpd) of oil output.

The Gulf of Mexico produced 1.65 million bpd in July, according to the U.S. government. The region, which accounts for 17% of U.S. crude output, has been hit by several storms over the past few months, each of which only briefly dented oil output.

The Transocean Development Driller III, left, and the Transocean Development Driller II, right, the rigs drilling relief wells, are seen on the Gulf of Mexico near the coast of Louisiana Aug. 14. (AP Photo)

Hopes for a further pick-up in U.S. fuel demand faded as White House officials reiterated on Wednesday that “stimulus negotiations are off” a day after President Donald Trump halted talks on a broad relief package.

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The possibility that there will be no upcoming economic support measures comes as government data on Wednesday showed demand for oil at U.S. refineries is 13.2%

By Hadeel Al Sayegh and Davide Barbuscia

DUBAI, Oct 7 (Reuters)Just over six years ago, Dubai-listed Arabtec Holding ARTC.DU had investors eating out of its hands.

At a lavish shareholder meeting at Abu Dhabi’s St. Regis Hotel, the contractor that helped build the world’s tallest skyscraper, Dubai’s Burj Khalifa, outlined plans for listings in London, Hong Kong and New York.

Those plans never materialised. After capital injections between 2013 and 2017, management changes, layoffs and rounds of restructurings, Arabtec’s shareholders, which include Abu Dhabi state fund Mubadala, decided last week that the Gulf’s largest listed contractor should file for insolvency.

Arabtec had around $2.75 billion in total liabilities at the end of June, including almost $500 million in bank borrowing.

The liquidation, likely to lead to further layoffs in a company which had a 40,000 strong workforce at the end of last year, marks the end of an era of plentiful construction for local contractors.

“A great company that is 45 years old disappeared off the face of the earth. I find it extremely sad that an iconic company like that disappeared,” Ziad Makhzoumi, chief financial officer of Arabtec from September 2008 to March 2013, told Reuters.

The coronavirus, low oil prices and production cuts have battered the Gulf economies this year, but the collapse of construction giants like Arabtec and engineering group Drake & Scull International in the United Arab Emirates has deeper roots.

Industry sources, analysts, and bankers point to an unsustainable business model used by some contracting firms in the region.

They undercut competitors on pricing and sometimes cost a project at a discount to win a tender in the hopes of making a profit through additional work when it starts running.

STATE-BACKED CLIENTS

It’s a model that works on the premise that supply