Oil gains for second day on hurricane disruptions

September 12, 2024 (MLN): Oil jumped for a second day as Hurricane Francine hit crude supply in the Gulf of Mexico.

Brent crude traded near $71.58 per barrel after rising 2.05% on Wednesday.

While West Texas Intermediate crude (WTI) rose to $68.2 a barrel.

Hurricane Francine — which made landfall in Louisiana — had forced the shut-in of about 670,000 barrels a day in the Gulf of Mexico, the US Bureau of Safety and Environmental Enforcement said as reported by Bloomberg.

Crude is still markedly lower year-to-date, with steep declines spurred by escalating concerns about weakening demand in top importer China, as well as signs of a US slowdown.

The slump has forced producer cartel OPEC+ to delay a planned relaxation of supply curbs by two months.

Hurricane fears are dominating, with “any disruptions in production likely to tighten supplies,” said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova Pte.

Still, recent price declines mean “traders are increasingly convinced of an economic slowdown, which will dent the demand for fuel.”

Oil’s climb on Thursday — which put Brent on course for its first back-to-back daily gain since Aug. 23 — came as stocks in Asia rose, with a tech-fueled rally on Wall Street spreading across the region.

Investors expect that the Federal Reserve will start cutting interest rates next week.

Later Thursday, the IEA will release its monthly analysis, offering insight into conditions in 2025.

Last month, the Paris-based group said inventories were going to build next year even if OPEC+ canceled its supply increases.

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