Trending: Gulf of Mexico storm seen stemming oil supplies

A tropical storm brewing in the Gulf of Mexico may well boost oil prices as producers shut down output to protect operations on Tuesday.

Although the fears of the storm helped support Brent Crude and the West Texas Intermediate earlier in the session, the WTI has since about-turned and was last seen down 1.1% at $46.45.

That said, if the storm goes according to plan it could have ramifications for oil supply.

"Tropical Depression Nine", as the weather front is currently known, is threatening to turn into a full-blown tropical storm, prompting oil companies in the Gulf to shut their wells down in preparation.

Speculation that an informal Opec meeting could take place on the sidelines of the International Energy Forum being held in Algeria next month has also helped boost prices. Investors are hoping that oil-producing nations will agree to limit production.

Oversupply has dogged oil prices for the past two years and forced oil prices down to less than $30 a barrel in February.

Earlier on Tuesday, Bloomberg reported that new discoveries of oil are at a 70-year low, suggesting a shortfall is in the pipeline.

Meanwhile, US government estimates suggest that the global demand for the commodity will grow from 94.8mln barrels a day to 105.3mln by 2026.