Oil prices increased on Tuesday, driven by concerns over U.S. supply disruptions following Hurricane Francine and growing expectations that the U.S. Federal Reserve may cut interest rates.
International benchmark Brent crude rose by 0.26% to $72.94 per barrel at 10.37 a.m. local time (0737 GMT), up from the previous session’s close of $72.75.
US benchmark West Texas Intermediate (WTI) increased 0.42% to $69.31 per barrel after closing at $69.02 in the prior session.
Oil prices extended their gains on Tuesday after Hurricane Francine disrupted a significant portion of U.S. oil and gas production.
The storm, which hit the U.S. Gulf Coast last week as a Category 2 hurricane, curtailed energy output in the Gulf of Mexico—a key region for U.S. oil and natural gas supply.
According to the Bureau of Safety and Environmental Enforcement, about 12.18% of oil production and 16.02% of natural gas output in the Gulf remains offline as of Monday due to the storm’s impact.
These production cuts are intensifying supply concerns in the market, further pushing oil prices upward.
Markets await an interest rate cut decision from the US Federal Reserve (Fed) on Wednesday, which would be the first rate cut since 2020.
Lower interest rates could reduce the cost of borrowing in the country, fueling economic activity and oil demand.
Analysts predict that there is a 70% probability that the Fed will cut interest rates by 50 basis points during the meeting.
Ahead of the Fed’s interest rate decision, 3 Democratic senators, including Elizabeth Warren, called on the Fed to reduce the interest rate by 75 basis points to protect the US economy.
