After a rocky start that saw Brent crude fall below $70 a barrel on Tuesday for the first time since late 2021, both benchmarks will end a run of weekly losses if those gains hold. WTI is expected to gain more over 2% weekly, while Brent is expected to increase by roughly 1.7% at present prices.
On September 13, oil prices increased, continuing a recent uptrend that was initiated by production disruptions in the US Gulf of Mexico, as Hurricane Francine compelled producers to evacuate platforms prior to its landfall in Louisiana.
By 00:16 GMT, Brent crude futures had increased by 34 cents, or 0.5%, to $72.31 per barrel. The price of a barrel of U.S. West Texas Intermediate crude futures increased by 38 cents, or 0.6%.
After a rocky start that saw Brent crude fall below $70 a barrel on Tuesday for the first time since late 2021, both benchmarks will end a run of weekly losses if those gains hold. WTI is expected to gain more over 2% weekly, while Brent is expected to increase by roughly 1.7% at present prices.
As estimates of the loss of supply from Francine surfaced, oil producers planned to resume operations in the US Gulf of Mexico on Thursday by assessing damages and doing safety inspections.
September production in the region is expected to decline by 50,000 barrels-per-day (bpd) month over month, according to UBS analysts, while FGE analysts predicted a 60,000 bpd decline to 1.69 million bpd.
Nearly 42% of the oil production in the region was shut down as of Thursday, according to official figures.
After a severe selloff earlier in the week that saw benchmarks drop to multi-year lows due to demand fears, the supply shock helped oil prices recover.
This week, the International Energy Agency and the Organization of Petroleum Exporting Countries both reduced their projections for demand growth, citing economic difficulties in China, the country that imports the most oil globally. Speakers at this week’s APPEC conference stated that China’s oil demand is being affected by the transition to lower-carbon fuels.
China’s imports of crude oil decreased 3.1% on average between January and August of this year and August of last year, according to customs data released on Tuesday.
In a letter to clients, FGE analysts stated, “Disappointing August trade data further underscored China’s trailing domestic oil demand, which has become a hot topic.”
Concerns about demand have increased in the US as well. This week, U.S. gasoline and distillate futures fell to multi-year lows as analysts pointed out that the top petroleum-consuming nation’s demand was lower than anticipated.
According to data released on Wednesday by the U.S. Energy Information Administration, US oil and fuel stockpiles increased last week despite a steep fall in demand.
