Oil prices jumped about three percent as producers assessed the damage to US production in the Gulf of Mexico after Hurricane Francine passed through offshore oil production areas before weakening and turning into a tropical storm.
UPS analysts estimated that up to 1.5 million barrels of Gulf of Mexico production were disrupted by the storm that hit the southern Mississippi River early Thursday.
US West Texas Intermediate crude futures rose $1.66, or 2.47 %, to $68.97 a barrel at settlement, and Brent crude futures rose $1.70, or 2.4 %, to $72.31 a barrel.
The futures of both crudes rose more than two percent on Wednesday as companies evacuated more than 171 offshore platforms due to the hurricane. The resulting disruption is expected to reduce production this month from the Gulf of Mexico by about 50,000 barrels per day, according to UBS analysts.
Concerns about weak global oil demand, particularly from China, have weighed heavily on prices in recent months, with Brent crude futures settling at their lo
west in nearly three years on Tuesday after the OPEC+ alliance of oil producers cut its annual demand growth forecast for the second straight month.
The International Energy Agency cut its 2024 oil demand growth forecast by 70,000 barrels per day, or about 7.2 %, to 900,000 barrels per day in its monthly oil market report on Tuesday. The Paris-based agency attributed the lower forecast to the impact of weak Chinese consumption and weak growth elsewhere.
The United States, the world’s biggest oil consumer, has also shown signs of weakening demand.
The Energy Information Administration said on Tuesday that U.S. crude inventories rose last week as crude imports grew, exports fell and fuel demand declined.
U.S. gasoline prices are heading toward their lowest levels in three years due to weak demand and ample supplies, analysts said. Gasoline consumption in the United States represents about nine percent of global oil demand.
Source: National Iraqi News Agency