Oil logs first weekly gain in a month, snapping bearish sell-off from 33-month low; Brent up 2% to $72/bbl | Stock Market News
Source: Live Mint
International crude oil prices logged their first weekly gain after almost one month in the previous session after Hurricane Francine caused production halts in the US Gulf of Mexico. Crude oil snapped the bearish sell-off tone buoyed by weather-related hurricane warnings after benchmark Brent crude futures crashed to a 33-month low over demand and oversupply concerns earlier this week.
Brent settled lower on Friday, September 13, after US Gulf of Mexico crude production resumed following Hurricane Francine and a weekly rise in US rig count. Brent crude futures settled at $71.61 a barrel, down 36 cents or 0.5 per cent. US West Texas Intermediate crude (WTI) settled at $68.65 a barrel, down 32 cents, or 0.5 per cent. Back home, crude oil futures settled 0.46 per cent lower at ₹5,782 per barrel on the multi-commodity exchange (MCX).
Crude oil recovers from 33-month low: What’s lifting the sentiment?
-As US Gulf Coast production and refining activity resumes, investors have opted to offload oil contracts until the weekend. For the week, oil futures finished higher following sharp storm-related increases early in the week, breaking a streak of declines. Brent logged an increase of about 0.8 per cent since the close of last Friday’s session, while WTI registered a roughly 1.4 per cent gain.
-Official data showed that, as of Thursday, the storm had nearly shut in 42 per cent of the region’s oil production, accounting for about 15 per cent of US output. The cuts are expected to prove brief and, within the broader context, are unlikely to spur much movement in the crude balances given the importance of shale production, which accounts for the major portion of US output.
-Crude prices also took a hit from the US rig count from energy services group Baker Hughes, opening a new tab, which reported the biggest weekly rise in oil and natural gas rigs in a year. The oil and gas rig count rose by eight in the week to September 13 to 590, returning to mid-June levels. The increase was the biggest since the week of September 15, 2023. Crude oil rigs rose by five to 488 this week, while gas rigs rose by three to 97.
-The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) lowered their demand growth forecasts, citing economic struggles in China, the world’s largest oil importer. Oil stockpiles also rose across the board last week as crude imports grew and exports dipped, while fuel demand weakened, said the Energy Information Administration (EIA).
-Investors look forward to next week’s US Federal Reserve’s two-day policy meeting. The US Fed is widely expected to cut interest rates on Wednesday.
