Oil prices stabilize amid supply disruptions, weak demand
Date
9/11/2024 6:23:19 AM
(MENAFN) Oil prices held steady in early trading on Tuesday as investors weighed the impact of Tropical Storm Francine on supply and the potential for further production cuts due to sluggish demand from China. By 0004 GMT, brent crude futures saw a modest increase of 16 cents, or 0.22 percent, reaching USD72 per barrel, while West Texas Intermediate (WTI) crude futures were up 12 cents, or 0.17 percent, at USD68.83 per barrel. Both benchmarks experienced a rise of approximately 1 percent during Monday's trading session.
The U.S. Coast Guard had to order a halt to all operations in Brownsville and several smaller Texas ports on Monday as Tropical Storm Francine advanced through the Gulf of Mexico. The storm is expected to strengthen significantly over the next couple of days and may evolve into a hurricane, as indicated by the National Hurricane Center. In response to the storm, major oil companies have taken precautionary measures: Exxon Mobil has suspended production at its Hoover offshore platform, Shell has halted drilling operations at two of its platforms, and Chevron has begun shutting down oil and gas production at two of its offshore facilities. Analysts from ANZ Bank estimate that at least 125,000 barrels per day of oil capacity could be affected by these disruptions.
On the other hand, global commodity trading firms like Gunvor and Trafigura have forecasted that oil prices will likely remain between USD60 and USD70 per barrel. This forecast is influenced by ongoing weak demand from China and a persistent global oversupply situation, as discussed by executives at the annual Asia-Pacific Petroleum Conference (APEC) on Monday.
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