Sept 12 (Askume) – Oil prices rose more than 1% on Thursday on concerns about the impact of Hurricane Francine on U.S. output, although a gloomy demand outlook limited gains.
November Brent crude futures were up 94 cents, or 1.3%, at $71.55 a barrel at 1205 GMT. U.S. crude futures for October rose $1, or 1.5%, to $68.31.
As the U.S. shut down offshore platforms in the Gulf of Mexico and Hurricane Francine makes landfall in southern LouisianaBoth contracts rose over 2% on the day, disrupting operations at coastal refineries.
UBS analysts said: “Hurricane Francine may disrupt US oil production by about 1.5 million barrels, we estimate that Gulf of Mexico oil production will be reduced by about 50,000 barrels per day in September.”
He said he expects Brent crude oil prices to rise above $80 a barrel again in the coming months.
About 39% of oil production and nearly half of natural gas output in the Gulf of Mexico remained shut Wednesday, offshore regulators said. A total of 171 production platforms and three drilling platforms were evacuated.
“The region accounts for about 15% of US oil output and any disruption in production could tighten supplies in the short term,” said Priyanka Sachdeva, senior market analyst at Singapore brokerage Phillip Nova.
But as the storm neared land, the oil market’s attention turned to falling demand.
On Thursday, the International Energy Agency (IEA) cut its 2024 oil demand growth forecast by 70,000 barrels per day, or about 7.2%, to 900,000 barrels per day , citing weak demand in China .
The US Energy Information Administration (EIA) said on WednesdayUS oil inventories generally rose last week due to higher crude oil imports and lower exports .
However, OANDA senior market analyst Calvin Wong said that the medium-term outlook for WTI crude oil remains bearish due to weak demand in China and “growth concerns” in the United States.
Earlier this week, the Organization of Petroleum Exporting Countries (OPEC) lowered its forecast for global oil demand growth this year and lowered its forecast for 2025, its second consecutive reduction.
Both oil benchmarks fell following Tuesday’s cuts .
Traders are also awaiting data – a producer prices report and a weekly jobless claims report are both due at 1230 GMT.
