 "Savings for Indian refiners from purchasing Russian oil have decreased to a third of what they were in the years following Russia's invasion of Ukraine, which triggered global crises, sanctions, and discounted Russian oil seeking buyers. Despite this")
Investors are awaiting the US Federal Reserve’s policy meeting over Sept. 17-18 with expectations of a cut to interest rates. | Representative Picture
Oil prices rose almost 2 per cent on Thursday, extending a rebound spurred by concern over Hurricane Francine’s impact on US output, though a gloomy demand outlook capped gains.
Brent crude futures for November rose $1.24, or 1.8 per cent, to $71.85 a barrel by 1008 GMT. US crude futures for October were up $1.26, or 1.9 per cent, at $68.57.
Both contracts rose by more than 2 per cent in the previous session as offshore platforms in the US Gulf of Mexico were shut and refinery operations on the coast were disrupted by Hurricane Francine’s landfall in southern Louisiana on Wednesday.
“Hurricane Francine has likely disrupted about 1.5 million barrels of US oil production, which we estimate will reduce September production in the Gulf of Mexico by around 50,000 barrels per day (bpd),” UBS analysts said.
Nearly 39 per cent of oil and almost half of natural gas production in the Gulf of Mexico was offline on Wednesday, the offshore regulator said. A total of 171 production platforms and three rigs had been evacuated.
“The region accounts for about 15 per cent of US oil production, with any disruptions in production likely to tighten supplies in the near term,” said Priyanka Sachdeva, senior market analyst at Singapore-based brokerage Phillip Nova.
But with the storm set to dissipate after landfall, oil market attention began to turn to lower demand.
On Thursday the International Energy Agency (IEA) cut its 2024 oil demand growth forecast by 70,000 bpd, or about 7.2 per cent, to 900,000 bpd, citing muted Chinese demand.
US oil stockpiles rose across the board last week as crude imports grew and exports dipped, the Energy Information Administration (EIA) said on Wednesday.
Despite worries over Hurricane Francine, the medium-term trend remains bearish for WTI crude, supported by weak demand from China and “growth scare concerns” in the US, said Kelvin Wong, senior market analyst at OANDA.
Earlier in the week, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth this year and trimmed its expectation for 2025, its second consecutive downward revision.
Both oil benchmarks tanked on Tuesday after the downward revision.
Meanwhile, investors are awaiting the US Federal Reserve’s policy meeting over Sept. 17-18 with expectations of a cut to interest rates.
Lower interest rates could stimulate economic growth and increase demand for oil.
Traders are also awaiting US economic data expected later on Thursday.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Sep 12 2024 | 4:33 PM IST
