Oil Prices Rebound as US Inventories Drop and Hurricane Francine Threatens Production
Crude prices experienced a rebound of over 1% on Wednesday, partially recovering from the previous day’s losses. This upturn was primarily driven by a combination of factors, including a decrease in US crude inventories and concerns about potential supply disruptions due to Hurricane Francine.
According to sources citing the American Petroleum Institute’s latest weekly report, US crude stocks saw a substantial decline of 2.793 million barrels. Additionally, gasoline inventories fell by 513,000 barrels, while distillates saw a modest increase of 191,000 barrels.
As of 10:50 GMT, Brent crude futures climbed to $70.65 per barrel. Simultaneously, US crude futures rose to $67.29. This recovery comes after a significant drop on Tuesday, which saw Brent falling below $70 to its lowest point since December 2021, and US crude touching its lowest level since May 2023.
The price recovery was also influenced by concerns about Hurricane Francine’s impact on US oil production. The US Bureau of Safety and Environmental Enforcement reported that approximately 24% of crude production and 26% of natural gas output in the Gulf of Mexico were offline due to the storm.
However, the market remains cautious due to broader concerns about weak global demand. OPEC recently revised down its 2024 oil demand growth forecast for the second time, contributing to the previous day’s price slump.
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