Oil prices recovered from this year’s lowest levels during the week ending Sept. 13 amid concern over supply shortages in US caused by extreme weather events.
The International benchmark Brent crude traded at $72.57 per barrel at 1.54 p.m. local time (1054 GMT) on Friday, up by around 2.1% relative to the closing price of $71.06 a barrel last week.
West Texas Intermediate (WTI), the American benchmark, traded at $69.67 a barrel at the same time on Friday, an increase of about 2.9% from last Friday’s session, which closed at $67.67 per barrel.
Brent oil fell below $70 per barrel for the first time since December 2021 on late Tuesday. US benchmark West Texas Intermediate (WTI) declined to as low as $65.27 per barrel, the lowest level since May 2023, during the same session.
Data indicating a slowdown in economic activity in the world’s top oil consumers, the US and China, fueled market players’ demand fears and contributed to the drop in prices.
Downward price movements were influenced by the OPEC’s revision to its global oil demand growth forecast for this year and 2025. The group lowered its forecast by 80,000 bpd for this year and by 40,000 bpd for 2025.
However, prices started to rebound from the loss in early trading on Wednesday.
The concern that oil production would be interrupted due to severe weather in the US, the world’s largest oil consuming country, supports the partial rise in prices.
The storm, which started in the Gulf of Mexico on Monday, turned into a ‘Category 1’ hurricane late Tuesday and quickly grew to a ‘Category 2’ storm once it reached the US coastal state of Louisiana on Wednesday at 17.00 local time (2300 GMT), the National Hurricane Center (NHC) announced.
The Bureau of Safety and Environmental Enforcement (BSEE) announced they were monitoring offshore oil and gas operators in the Gulf of Mexico as they evacuate platforms and rigs in response to the storm.
Personnel from 169 production platforms, accounting for 45.55% of output form the Gulf of Mexico, have been evacuated since the beginning of the storm, BSEE said.
BSEE estimates that approximately 41.74% of the current oil production and 53.32% of the current natural gas production in the Gulf of Mexico has ground to a halt in response to the severity of the storm.
