Oil rises on US supply disruptions risks

Oil prices rose today, Sept. 11, after sharp losses in the previous session. The positive momentum today followed the fears of supply disruption in the US as some production facilities in the Gulf of Mexico closed amid warnings of a strong tropical storm hitting the region. 

Brent crude was trading up 0.56% at $69.58 a barrel at 08:10 am Makkah time. WTI crude rose 0.56% to $66.12 a barrel. 

Both benchmark grades shed nearly $3 per barrel yesterday, after OPEC lowered its expectations for oil demand growth in 2024 and 2025. 

The US Energy Information Administration (EIA) also lowered its forecast for the average price of Brent crude to $81.64 during the fourth quarter of this year, which is 5% less than its previous estimate. 

Meanwhile, concerns about disruption to US supplies offset the negative impact of demand and price expectations, with the US National Hurricane Center saying yesterday that Tropical Storm Francine was on the verge of becoming a hurricane. 

The center called on Louisiana residents to evacuate areas near the coast and head inland. It also asked oil and gas companies to stop production from the Gulf of Mexico, Reuters reported. 

The US Bureau of Safety and Environmental Protection said in a statement that about 24% of oil production capacity and 26% of natural gas production in the Gulf of Mexico were disrupted due to the storm. 

Investors are awaiting today the release of US oil inventory data from the EIA, which is expected to have fallen by 900,000 barrels last week after a decline of nearly seven million barrels the previous week.