Crude Oil rises to near $70 due to output disruptions in the US Gulf of Mexico
- WTI price appreciated as Hurricane Francine caused output disruptions in the US Gulf of Mexico.
- Official data showed that nearly 42% of US Gulf of Mexico’s Oil production had been shut in as of Thursday.
- Both OPEC and IEA have lowered their forecasts for Oil demand growth, citing economic challenges in China.
West Texas Intermediate (WTI) oil prices rose for the third day in a row, trading at $68.50 during Friday’s Asian session. The surge in crude oil prices is being pushed by Hurricane Francine, which caused producers to evacuate platforms ahead of its landfall on the Louisiana coast on Wednesday, disrupting output in the US Gulf of Mexico.
On Thursday, oil producers conducted damage assessments and safety inspections in preparation for resuming operations in the US Gulf of Mexico. According to Reuters, UBS analysts predicted that oil output in the region in September would fall by 50,000 barrels per day (bpd) compared to the previous month. Meanwhile, FGE experts predicted a bigger decline of 60,000 bpd, bringing overall output to 1.69 million bpd. Official estimates showed that almost 42% of the region’s oil output had been halted as of Thursday.
This week, both the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) reduced their projections for oil demand growth, citing economic concerns in China, the world’s largest oil importer. Furthermore, speakers at the APPEC conference stated that China’s move to lower-carbon fuels is reducing its oil demand.
China’s crude oil imports were 3.1% lower from January to August this year than the same time last year, according to customs data released on Tuesday. In addition to concerns about China, demand fears have grown in the United States. US gasoline and distillate futures hit multi-year lows this week, with analysts pointing to weaker-than-expected demand in the world’s largest petroleum-consuming country.
