Oil prices rose by more than 1 per cent on Thursday to extend a rebound spurred by concern over Hurricane Francine's impact on U.S. output, though a gloomy demand outlook capped gains, reports Reuters.
Brent crude futures for November rose 94 cents, or 1.3 per cent, to $71.55 a barrel by 1205 GMT. U.S. crude futures for October were up $1, or 1.5 per cent, at $68.31.
A day earlier both contracts had gained more than 2 per cent as offshore platforms in the U.S. Gulf of Mexico were shut and coastal refinery operations were disrupted by Hurricane Francine's landfall in southern Louisiana.
"Hurricane Francine has likely disrupted about 1.5 million barrels of U.S. oil production, which we estimate will reduce September production in the Gulf of Mexico by around 50,000 barrels per day (bpd)," UBS analysts said.
They added that they expect Brent crude oil to move back up above $80/barrel over the coming months.
Nearly 39 per cent 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 per cent of U.S. oil production, with any disruptions in production likely to tighten supplies in the near term," said Priyanka Sachdeva, senior market analyst at Singapore-based brokerage Phillip Nova.
But with the storm set to dissipate after landfall, oil market attention began to turn to lower demand.
On Thursday the International Energy Agency (IEA) cut its 2024 oil demand growth forecast by 70,000 bpd, or about 7.2 per cent, to 900,000 bpd, citing muted Chinese demand. US oil stockpiles rose across the board last week as crude imports grew and exports dipped, the Energy Information Administration (EIA) said on Wednesday.
However, the medium-term trend remains bearish for WTI crude, supported by weak demand from China and "growth scare concerns" in the U.S., said Kelvin Wong, senior market analyst at OANDA.
Earlier in the week, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth this year and trimmed its expectation for 2025, its second consecutive downward revision.
Both oil benchmarks tanked on Tuesday after the downward revision.
Traders are also awaiting data - a reading of producer prices and the weekly jobless claims report are both due at 1230 GMT.
