Global oil prices rebound as hurricane threatens output

WEB DESK: Global oil prices rose by more than 1 per cent on Wednesday, recovering some of the losses from Tuesday. This increase occurred due to a drop in US oil stocks and worries that Hurricane Francine might disrupt oil production in the US. These factors helped offset concerns about low global demand.

US crude oil stocks fell by 2.8 million barrels, gasoline stocks went down by 513,000 barrels, and distillate inventories increased by 191,000 barrels, according to the American Petroleum Institute’s latest report.

Brent crude oil futures rose by $1.10, or 1.6 per cent, reaching $70.29 a barrel, while US crude oil futures gained $1.11, or 1.7 per cent, to $66.86.

Tamas Varga from oil broker PVM said the report was reassuring because it showed a significant drop in crude oil stocks, a surprising decrease in gasoline stocks, and a small increase in distillate inventories.

On Tuesday, both Brent and US crude oil prices fell sharply, with Brent dropping below $70 to its lowest point since December 2021 and US crude hitting its lowest level since May 2023. This drop followed a second revision of OPEC’s 2024 oil demand growth forecast.

Analysts noted that fears about Hurricane Francine affecting US oil production also supported the price rebound. Yuki Takashima from Nomura Securities explained that the market bounced back after the big drop on Tuesday, with worries about the hurricane adding to the support.

The US Bureau of Safety and Environmental Enforcement reported that about 24 per cent of crude oil production and 26 per cent of natural gas output in the US Gulf of Mexico were affected by the storm.

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