Oil Prices Dip as Chinese Demand Weakens Amid Storm-Induced Supply Disruptions

Oil prices dipped on Tuesday, reflecting weak demand from China that offset supply disruptions caused by Tropical Storm Francine. Brent crude futures dropped by 0.06%, trading at $72.80 a barrel by 0334 GMT, while US West Texas Intermediate (WTI) crude slipped by 0.15%, reaching $68.60 a barrel. Both benchmarks had gained roughly 1% during Monday’s settlement.

Tropical Storm Francine wreaked havoc along the Gulf of Mexico, leading to the shutdown of key oil platforms and port closures. ExxonMobil halted production at its Hoover offshore platform, while Shell and Chevron also paused operations on some of their platforms. The National Hurricane Center (NHC) reported that at least 125,000 barrels per day (bpd) of oil production could be affected by the storm.

Despite these disruptions, weak Chinese demand continued to weigh heavily on global oil prices. Data released on Monday showed China’s domestic demand remained fragile, with consumer inflation rising at the fastest pace in six months but producer price deflation worsening. Global commodity traders anticipate oil prices will range between $60 and $70 per barrel as China’s shift toward lower-carbon fuels and its sluggish economy dampen demand.

Investors remain cautious, and oil prices are expected to stay volatile as the market awaits reports from the Organization of the Petroleum Exporting Countries (OPEC) and the US Energy Information Administration (EIA), both scheduled to release important updates soon.