Oil Prices Surge Amid US Gulf Production Disruption from Hurricane Francine

Oil prices continued their upward trend on Friday, fueled by significant output disruptions in the US Gulf of Mexico due to Hurricane Francine. Brent crude futures rose by 38 cents to $72.35 per barrel, marking a 0.53% increase, while US West Texas Intermediate (WTI) crude futures climbed by 40 cents to $69.37, a 0.58% gain.

The rally follows the evacuation of production platforms in the Gulf, with nearly 42% of the region’s oil output shut down as of Thursday. UBS analyst Giovanni Staunovo noted that ongoing disruptions in Libya, coupled with Hurricane Francine’s impact, have kept the oil market tight. Additionally, a weaker US dollar has made dollar-denominated oil more attractive to foreign buyers.

If these gains hold, Brent is set for a weekly increase of 1.9%, while WTI could see a 2.5% rise, breaking a streak of declines. However, market analysts warn that if production delays are short-lived and damage to oil platforms is minimal, these price increases could be reversed.

The broader demand outlook remains a challenge, with the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) both lowering their demand growth forecasts due to economic struggles in China.