Oil prices rise, set for positive week amid rebound from 3-year lows

Investing.com– Oil prices rose in Asian trade on Friday and were set for a positive close to the week as concerns over supply disruptions stemming from Hurricane Francine helped crude rebound from near three-year lows. 

But crude prices were still nursing steep losses from last week, and were trading only marginally above this week’s lows, as persistent concerns over slowing demand stemmed crude’s advance. 

Brent oil futures expiring in November rose 0.6% to $72.43 a barrel, while West Texas Intermediate crude futures rose 0.7% to $68.60 a barrel by 21:23 ET (01:23 GMT). 

Both contracts were up 1% and 2.4% this week, respectively. 

Hurricane Francine disrupts Gulf of Mexico production

Oil production and refinery activities in the Gulf of Mexico were battered by Hurricane Francine as it made landfall in Louisiana earlier this week, although it was later downgraded to a tropical storm. 

A slew of offshore platforms in the storm’s path were evacuated through the week, while operations in crude and natural gas shipping terminals were also suspended. 

The Gulf of Mexico accounts for nearly a quarter of all U.S. oil production, with any extended production halts heralding tighter supplies in the country. 

Oil markets grapple with demand concerns 

But despite some positive momentum this week, oil prices were still trading close to three-year lows amid persistent concerns over slowing demand.

Weak economic signals from China were a key driver of these concerns, as traders positioned for potentially weaker demand in the world’s biggest oil importer.

Both the Organization of Petroleum Exporting Countries and the International Energy Agency slashed their oil demand forecasts for 2024 in separate reports released earlier in the week, citing concerns over China.

But they also said demand would come from other sources in Asia, especially India, as the country sees outsized economic growth.

In the U.S., data showing a large build in gasoline and distillate inventories pushed up concerns that fuel demand in the country was slowing with the end of the travel-heavy summer season.