Crude oil up as hurricane Francine impacts production in Gulf of Mexico

Crude oil futures traded higher on Thursday morning following supply disruptions due to hurricane Francine in the Gulf of Mexico.

At 9.56 am on Thursday, November Brent oil futures were at $71.03, up by 0.59 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $67.66, up by 0.52 per cent.

• Also read: Turmeric likely to gain a tad on festival demand

September crude oil futures were trading at ₹5691 on Multi Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹5690, up by 0.02 per cent, and October futures were trading at ₹5666 against the previous close of ₹5658, up by 0.14 per cent.

Several offshore platforms were shut down in the Gulf of Mexico due to Francine’s landfall in southern Louisiana on Wednesday. This impacted the operations of several refineries in the region.

In their Commodities Feed, ING Think’s Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, said the hurricane has seen almost 675,000 barrels a day of oil production shut-in. That is equivalent to 39 per cent of the US Gulf of Mexico’s output, they said.

In the US, the annual inflation rate slowed to 2.5 per cent in August from 2.9 per cent in July. Market was expecting it to be around 2.6 per cent.

Market is also expecting the US Federal Reserve to reduce interest rate following the latest inflation numbers. The reduction in interest rates would help boost demand for commodities such as crude oil.

Meanwhile, the weekly petroleum status report by the US EIA (Energy Information Administration) showed an increase in the crude oil inventories in the US for the week ending September 6.

According to the report, US commercial crude oil inventories increased by 0.8 million barrels for the week ending September 6. At 419.1 million barrels, US crude oil inventories were about 4 per cent below the five-year average for this time of year.

Total motor gasoline inventories increased by 2.3 million barrels from last week and were about 1 per cent below the five-year average for this time of year.

Total products supplied over the last four-week period averaged 20.5 million barrels a day, down by 2.2 per cent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9 million barrels a day, up by 0.9 per cent from the same period last year.

September zinc futures were trading at ₹260.60 on MCX during the initial hour of trading on Thursday against the previous close of ₹259.30, up by 0.50 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), October guargum contracts were trading at ₹10545 in the initial hour of trading on Thursday against the previous close of ₹10511, up by 0.32 per cent.

September jeera futures were trading at ₹25620 on NCDEX in the initial hour of trading on Thursday against the previous close of ₹25540, up by 0.31 per cent.