Crude oil futures traded higher on Friday morning due to the impact of hurricane Francine in the Gulf of Mexico.
At 9.54 am on Friday, November Brent oil futures were at $72.27, up by 0.42 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $69.39, up by 0.61 per cent.
September crude oil futures were trading at ₹5825 on Multi Commodity Exchange (MCX) during the initial hour of trading on Friday against the previous close of ₹5809, up by 0.28 per cent, and October futures were trading at ₹5783 against the previous close of ₹5765, up by 0.31 per cent.
Referring to the offshore operator reports, the US Bureau of Safety and Environmental Enforcement (BSEE) said on Thursday that personnel have been evacuated from a total of 169 production platforms, 45.55 per cent of the 371 manned platforms in the Gulf of Mexico.
Production platforms are the offshore structures from which oil and natural gas are produced and transported to shore. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project’s duration.
BSEE estimated that approximately 41.74 per cent of the oil production and 53.32 per cent of the natural gas production in the Gulf of Mexico have been shut-in due to the hurricane’s impact.
In their Commodities Feed, ING Think’s Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, said oil prices continued their move higher on Thursday. ICE Brent settled more than 1.9 per cent higher on the day, leaving it within striking distance of $72 a barrel. Supply disruptions from Francine continue to provide some support, they said.
Meanwhile, International Energy Agency’s (IEA) Oil Market Report for September said that global oil demand growth continues to decelerate, with reported year-on-year gains of 800,000 barrels a day in the first six months of 2024, lowest since 2020.
The chief driver of this downturn is a rapidly slowing China, where consumption contracted year-on-year for a fourth straight month in July, by 280,000 barrels a day, it said.
The rapid decline in global oil demand growth in recent months, led by China, has fuelled a sharp sell-off in oil markets. Brent crude oil futures have plunged from a high of more than $82 a barrel in early August to a near three-year low at just below $70 a barrel on 11 September, despite hefty supply losses in Libya and continued crude oil inventory draws, the report said.
Surging sales of electric vehicle are reducing road fuel demand in China, while the development of a vast national high-speed rail network is restricting growth in domestic air travel, it said.
September natural gas futures were trading at ₹199.10 on MCX during the initial hour of trading on Friday against the previous close of ₹200.30, down by 0.60 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October jeera contracts were trading at ₹26205 in the initial hour of trading on Friday against the previous close of ₹25695, up by 1.98 per cent.
September cottonseed oilcake futures were trading at ₹3590 on NCDEX in the initial hour of trading on Friday against the previous close of ₹3632, down by 1.16 per cent.
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