Hurricane Francine Disrupts Gulf Oil Output But Crude Prices Remain Steady
Hurricane Francine is making its way toward the Gulf Coast, where it threatens a key hub of U.S. oil and gas production as well as refinery operations. Despite this upheaval, prices for both crude and refined products have not reacted dramatically, suggesting that market sentiment is largely influenced by a potential drop in demand rather than immediate supply concerns.
According to Colin Cieszynski, portfolio manager and chief market strategist at SIA Wealth Management, traders seem to prioritize worries about a possible oversupply. "In this context, supply cuts hold less significance compared to times when demand is high," Cieszynski stated.
On Wednesday, prices for U.S. benchmark West Texas Intermediate (WTI) and global benchmark Brent crude saw minor upticks. However, they remain around 8% lower for the month after reaching their lowest levels since late 2021.
As a result of Hurricane Francine, the Interior Department's Bureau of Safety and Environmental Enforcement reported that 38.56% of the regional oil production and 48.77% of natural gas production have been halted due to the storm.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.