Oil stocks rally after US hurricane disruption
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More news: Oil stocks gained on the ASX as benchmark prices rebounded after Hurricane Francine hit offshore oil-producing areas in the US Gulf of Mexico before being downgraded to a tropical storm.
Oil majors Woodside Energy (1.6%), Santos (1.4%), Karoon Energy (0.8%) and Ampol (0.3%) were all trading higher by 12:15pm AEST.
The energy sector added 1.39% as the wider sharemarket rose 0.28%. Beach Energy, however, lowered 1.1%.
Oil prices rise as storm batters US Gulf of Mexico production
The news: Oil prices rebounded as producers assessed the impact on output in the US Gulf of Mexico after Hurricane Francine tore through offshore oil-producing areas before being downgraded to a tropical storm.
The numbers: Brent crude futures rose 1.9% to USD71.97 ($107.05) a barrel. US West Texas Intermediate crude futures (WTI) gained 2.5% to USD68.97.
The context: Both contracts had gained as companies evacuated offshore platforms due to Francine. Over 730,000 barrels per day, or nearly 42% of Gulf of Mexico oil output was shut-in due to the storm on Thursday, the US Bureau of Safety and Environmental Enforcement said.
UBS analysts estimated the disruptions will reduce output this month from the Gulf of Mexico by around 50,000 barrels per day.
Concerns about weak global oil demand, particularly from top importer China, have weighed heavily on prices in recent months.
Brent crude futures settled near a three-year low on Tuesday after the Organization of the Petroleum Exporting Countries plus (OPEC+) producer group slashed its annual demand growth forecasts for the second month in a row.
On Thursday, the International Energy Agency lowered its 2024 demand growth forecasts by more than 7% to 900,000 bpd, citing weak demand in China and feeble growth in other regions.
The US, the top consumer of oil, is also flashing signs of weak demand as oil stockpiles rose in the country with exports dipping and fuel demand slumping, data from the Energy Information Administration (EIA) showed.
The source: Reuters
