Oil is steady as supply disruptions from Hurricane Francine offset weak demand By Reuters

By Georgina McCartney

(Reuters) – Oil was steady in early trade on Tuesday as investors weighed supply disruptions from Tropical Storm Francine and the potential for further output cuts against persistently weak Chinese demand.

futures were up 16 cents, or 0.22 percent, at $72.00 a barrel by 00:04 GMT. U.S. West Texas Intermediate crude futures were up 12 cents, or 0.17 percent, at $68.83 a barrel.

Both benchmarks gained about 1 percent at Monday’s settlement.

The US Coast Guard ordered the closure of all operations at Brownsville and other small ports in Texas late Monday as Tropical Storm Francine moved across the Gulf.

The Port of Corpus Christi remained open but with restrictions.

The tropical storm was expected to strengthen significantly over the next two days and was expected to become a hurricane Monday night or Tuesday morning, according to the National Hurricane Center (NHC).

ExxonMobil (NYSE: ) said it halted production at its Hoover offshore production platform, while Shell ( LON: ) halted drilling operations at two platforms. Chevron (NYSE: ) also began shutting down oil and gas production at two of its offshore production platforms.

“At least 125,000 barrels per day (bpd) of oil capacity is at risk of disruption,” ANZ analysts said in a note, citing data from the NHC.

Elsewhere, global commodities traders Gunvor and Trafigura anticipate oil prices could range between $60 and $70 a barrel due to resurgent Chinese demand and persistent global oversupply, executives told attendees at the Asia Pacific Oil Conference (APPEC) Monday.

China’s shift to low-carbon fuels and a sluggish economy are slowing oil demand growth in the world’s biggest crude importer, speakers at the APPEC conference said.

China’s annual demand growth has slowed from about 500,000-600,000 bpd in the five years before the COVID-19 pandemic to 200,000 bpd now, said Daan Struyven, head of oil research at Goldman Sachs.

Refining margins in Asia fell to their lowest seasonal levels since 2020.