Oil prices rise from near 3-year lows on Francine impact, stocks in spotlight By Investing.com

Investing.com– Oil prices in Asia rose Wednesday from nearly three-year lows as traders watched the impact of Hurricane Francine on Gulf of Mexico production.

Prices also received some support from industry data showing an unexpected weekly drop in US oil inventories.

But oil markets have suffered heavy losses since Tuesday as disappointing Chinese import figures and a cut in the Organization of the Petroleum Exporting Countries (OPEC) demand forecast clouded the outlook for oil markets.

which ended in November rose 0.5% to $69.51 a barrel, while the price was up 0.6% at $65.50 a barrel at 8:34 p.m. ET (00:34 GMT).

Francine becomes a hurricane, Gulf of Mexico production affected

Francine became a Category 1 hurricane on Tuesday evening and is expected to make landfall in Louisiana on Wednesday.

The storm is set to leave a trail of destruction across the US Mid-South in the coming days and has caused a number of oil and gas producers to shut down production in the Gulf of Mexico.

The region accounts for about 15% of US oil production, and any disruptions to production are likely to lead to tighter supply in the short term.

US inventories see unexpected drop – API

Data showed that US oil inventories fell by 2.79 million barrels in the week ended September 6, compared with expectations for a rise of 0.7 million barrels.

The API data showed gasoline inventories fell, suggesting demand remained strong at the world’s largest fuel consumer even as the summer travel season drew to a close.

The API data generally predicts a similar reading for the official release, due later on Wednesday.

Oil drops near 3-year low on demand concerns

But despite the positive signs, oil prices fell to their lowest level since December 2021 on Tuesday, mainly due to concerns about weakening global demand.

The sell-off was initially fueled by data from China, which showed oil imports to the country fell for a third straight month in August, amid slowing growth and falling fuel demand from the world’s largest oil importer.

Fears of a demand slowdown were exacerbated by OPEC’s drastic cut in its demand growth forecast for the year. The cartel now sees global oil demand growth in 2024 at 2.03 mb, compared to previous forecasts of 2.11 mb.