Oil prices rose due to production disruptions in the US Gulf of Mexico
Oil prices rose on Friday, continuing a rally caused by production disruptions in the US Gulf of Mexico, where Hurricane Francine forced producers to evacuate rigs ahead of its approach to the Louisiana coast.
This is reported by the Reuters agency.
Brent crude futures rose 34 cents, or 0.5%, to $72.31 a barrel. West Texas Intermediate (WTI) crude futures rose 39 cents, or 0.6%, to $69.36 a barrel.
If these gains hold, both benchmarks will snap a streak of weekly declines, despite a difficult start to the week that saw Brent fall below $70 a barrel on Tuesday for the first time since late 2021. At current levels, Brent could end the week up around 1.7% and WTI up more than 2%.
“The previous decline to near three-year lows required a brief pause at the end of the week as market participants factored in short-term oil supply disruptions caused by Hurricane Francine,” IG strategist Yeap Jun Rong wrote.
Oil producers assessed damage and carried out safety checks on Thursday as they prepared to resume work in the US Gulf of Mexico, while estimates of supply losses from Francine emerged.
Analysts at UBS forecast production in the region to fall by 50,000 barrels per day (b/d) in September from the previous month, while analysts at FGE expected a drop of 60,000 b/d to 1.69 million b/d.
Official data showed that almost 42% of oil production in the region had been suspended as of Thursday.
“But if production delays prove to be short-lived and damage to oil rigs minimal, these gains could fade as the overall demand outlook continues to be a key factor limiting a sustained recovery,” Yeap added.
Economic truth.
