Oil prices saw an increase for the second consecutive day as Hurricane Francine caused significant disruptions to crude supply in the Gulf of Mexico. This rise in prices came amidst a broader positive market sentiment and growing anticipation for the latest insights from the International Energy Agency (IEA).
Hurricane Disruptions Drive Price Increase
Brent crude surged above $71 per barrel following a 2.1% increase on Wednesday, while West Texas Intermediate (WTI) hovered near $68. The US Bureau of Safety and Environmental Enforcement reported that Hurricane Francine, which made landfall in Louisiana, led to the shutdown of approximately 670,000 barrels per day in the Gulf of Mexico.
Ongoing Market Pressures
Despite this recent uptick, crude oil prices remain significantly lower year-to-date. The market has been pressured by escalating concerns over reduced demand from major importer China and signs of an economic slowdown in the US. These factors have prompted the OPEC+ cartel to postpone its planned easing of supply constraints by two months.
Impact of Hurricane on Market Sentiment
The current focus on hurricane-related disruptions highlights potential tightness in oil supplies. Priyanka Sachdeva, senior market analyst at Phillip Nova Pte, noted that while supply interruptions could tighten the market, recent price declines have led traders to increasingly anticipate an economic slowdown that might reduce fuel demand.
Broader Market Trends
Thursday’s oil price increase—marking Brent’s first consecutive daily gain since August 23—was accompanied by rising stock markets in Asia. The tech-driven rally on Wall Street has positively influenced regional markets, with investors speculating that the Federal Reserve may begin lowering interest rates next week.
Looking Ahead to IEA Report
Later on Thursday, the IEA is set to release its monthly report, which will provide projections for 2025. Last month, the Paris-based organization forecasted an inventory build-up for the coming year, even if OPEC+ decided to halt its planned supply increases.
Conclusion
As oil prices continue to react to immediate disruptions from Hurricane Francine and broader economic indicators, market participants remain focused on forthcoming reports from the IEA. The interplay between supply disruptions and economic forecasts will likely influence oil price movements in the near term.
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