Gulf hurricane powers oil price surge as demand weakens in China
Oil prices on the New York fuel exchange are gaining, continuing the upward rally caused by extraction disruptions in the Gulf of Mexico triggered by Hurricane Francine, which hit Louisiana on Wednesday.
A West Texas Intermediate crude barrel is priced at $69.45 on NYMEX in New York, up by 0.70%.
Oil prices rising
Brent on ICE is priced at $72.43 per barrel, up by 0.64%.
If the increases hold, both benchmarks will break the series of weekly declines despite a difficult start. On Tuesday, Brent crude fell below $70 per barrel for the first time since the end of 2021.
Oil producers assess damage and conduct safety inspections, preparing to resume operations in the Gulf of Mexico after Hurricane Francine hit Louisiana on Wednesday afternoon Eastern Time.
UBS analysts forecast that production in the region will decrease by 50 thousand barrels per day on a month-to-month basis; FGE analysts estimate a drop of 60 thousand barrels per day to 1.69 million.
Official data showed that on Thursday, almost 42% of oil production in the Gulf of Mexico region was shut down.
The supply shock helped oil prices recover from the sharp sell-off at the beginning of the week when demand concerns drove the benchmarks to multi-year lows.
Weakening oil demand in China
The Organization of the Petroleum Exporting Countries and the International Energy Agency lowered their growth forecasts for oil demand this week, citing economic difficulties in China, the world's largest oil importer. On a year-to-year basis, Chinese crude imports were down an average of 3.1% from January to August.
FGE analysts noted in a report that weakening domestic oil demand in China has become a "hot topic," which was further emphasized by disappointing trade data for August.
Demand concerns also rose in the United States. Gasoline and distillate futures in the U.S. were at multi-year lows this week.
