Oil prices rose more than 1% on Thursday, extending a rebound spurred by concern over Hurricane Francine’s impact on US output, though a gloomy demand outlook capped gains.
Brent crude futures for November were up 95 cents, or 1.4%, to $71.56 a barrel by 1322 GMT. US crude futures for October rose $1.02, or 1.5%, at $68.33.
Both contracts gained more than 2% on Wednesday as offshore platforms in the US Gulf of Mexico were shut and coastal refinery operations were disrupted by Francine’s landfall in southern Louisiana. “Hurricane Francine has likely disrupted about 1.5 million barrels of US oil production, which we estimate will reduce September production in the Gulf of Mexico by around 50,000 bpd,” UBS analysts said. They added that they expect the price of Brent crude oil to move back up above $80 per barrel over the coming months.
Nearly 39% of oil and almost half of natural gas production in the Gulf of Mexico was offline on Wednesday, the offshore regulator said. A total of 171 production platforms and three rigs had been evacuated. “The region accounts for about 15% of US oil production, with disruptions likely to tighten supplies,” said Priyanka Sachdeva.
