Oil prices rebounded on fears of supply disruptions from the tropical storm By Reuters

By Yuka Obayashi

TOKYO (Reuters) – Crude oil prices rose on Wednesday as worries about tropical storm Francine disrupting oil supplies outweighed worries about demand.

Futures were up 39 cents, or 0.6 percent, at $69.58 a barrel by 0031 GMT, while U.S. futures were at $66.19 a barrel, up 44 cents, or 0.7%.

Both benchmarks fell nearly $3 on Tuesday, with Brent hitting its lowest level since December 2021 and WTI falling to a low since May 2023 after OPEC+ revised down its demand forecast for this year and 2025.

“Investors adjusted their positions after Tuesday’s sharp decline,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan (OTC:) Securities.

“The recovery was also driven by concerns that the storm could disrupt supply, with some production units already suspended,” he said, although he predicted the market would remain bearish on fears of slowing global demand.

Tropical Storm Francine was on track to become a hurricane overnight, the US National Hurricane Center said, prompting Louisiana residents to flee inland and oil and gas companies to shut down production in the Gulf of Mexico.

About 24 percent of crude oil production and 26 percent of U.S. Gulf of Mexico production were offline because of the storm, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said Tuesday.

On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that global oil demand will rise by 2.03 million barrels per day (bpd) in 2024, down from last month’s forecast for an increase of 2.11 million barrels per day.

OPEC also cut its global demand growth estimate for 2025 to 1.74 million bpd from 1.78 million bpd.

But the US Energy Information Administration (EIA) said on Tuesday that global oil demand will rise to a record high this year, while production growth will be lower than previously forecast.

Meanwhile, China’s daily crude imports rose last month to the highest level in years, customs data and Reuters records showed on Tuesday, as shipments saw a tentative recovery on lower crude prices and improving margins. refinement.