The price of oil jumped by about 1.5% as concerns about the impact of Hurricane Francine on U.S. oil production outweighed concerns about weak global demand. The rebound in prices was also caused by partial profit-taking and U.S. crude oil inventories data.
Francine strengthened into a hurricane in the Gulf of Mexico, prompting gas companies to shut production. Overall, about 24% of oil production and 26% of natural gas production in the U.S. Gulf of Mexico were halted due to the storm.
Yesterday, prices for both brands of oil fell by almost $3 per barrel, while Brent reached its lowest level since December 2021, and WTI fell to its lowest since May 2023 in response to new OPEC forecasts for oil demand for 2024-2025. Oil demand is now expected to reach 2.03 million barrels per day in 2024 (-0.08 million barrels per day compared to the previous forecast) and 1.74 million barrels per day in 2025 (-0.04 million barrels per day compared to the previous forecast).
Meanwhile, the American Petroleum Institute reported that U.S. crude oil inventories fell by 2.793 million barrels last week, while gasoline inventories decreased by 513,000 barrels. Analysts predicted that oil reserves would increase by about 1 million barrels, and gasoline reserves would decrease by 0.1 million barrels.
However, despite today's price recovery, the oil market is likely to remain under pressure in the near term, as investors are concerned about slowing demand due to the economic downturn in China and the United States.