Oil prices rebounded on Wednesday as fears surrounding Tropical Storm Francine’s potential impact on oil supply overshadowed concerns about demand.
Brent crude futures increased by 39 cents, or 0.6 percent, reaching $69.58 a barrel by 00:31 GMT, while West Texas Intermediate crude rose 44 cents, or 0.7 percent, to $66.19 a barrel. Both benchmarks had declined nearly $3 on Tuesday, with Brent touching its lowest point since December 2021 and WTI falling to a low not seen since May 2023, following OPEC+’s downward revision of its demand projections for this year and 2025.
According to the U.S. National Hurricane Center, Tropical Storm Francine was poised to strengthen into a hurricane overnight on Tuesday, leading to evacuations in Louisiana and the shutdown of oil and gas operations in the Gulf of Mexico. The U.S. Bureau of Safety and Environmental Enforcement (BSEE) reported that approximately 24 percent of crude production and 26 percent of natural gas output in the Gulf of Mexico were offline due to the storm.
OPEC lowers demand forecasts
In a monthly report released on Tuesday, OPEC indicated that global oil demand is expected to rise by 2.03 million barrels per day (bpd) in 2024, a reduction from last month’s forecast of 2.11 million bpd. The organization also lowered its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd.
Moreover, the U.S. Energy Information Administration (EIA) stated on Tuesday that global oil demand is projected to reach a new record this year, while output growth is anticipated to be less than previously forecasted. Meanwhile, China’s daily crude oil imports surged last month to their highest level in a year, according to customs data and reports from Reuters, as shipments began to recover amid falling crude prices and improving refining margins.
For more news on markets, click here.
