Mubasher: Oil prices declined on Wednesday after the International Monetary Fund (IMF) downgraded its global growth projections.
However, losses were capped as Hurricane Michael headed towards Florida, slashing around 40% of the US crude production in the Gulf of Mexico.
By 8:03 am GMT, US Nymex crude futures declined 0.31% to $74.73 per barrel (pb), while international benchmark Brent futures fell 0.29% to $84.75 pb.
The IMF lowered its global economic growth expectations for this year and the next one on Tuesday, spurring worries that oil demand might plunge consequently.
Trade disputes and import tariff hikes were keeping a lid on commerce, and emerging economies were grappling with tighter financial conditions and capital outflows, the lender said.
Nevertheless, around 40% of the daily oil production in the US was lost from the Gulf of Mexico operations on Tuesday after producers evacuated 75 platforms ahead of Hurricane Michael, which ranked as an “extremely dangerous” Category 4 storm, according to the US National Hurricane Center.
The evacuations and shut-ins took place as the hurricane on course through the central Gulf to make landfall on Wednesday on the Florida Panhandle.
The Louisiana Offshore Oil Port, the largest private crude terminal in the US, said that it ceased activities at its terminal.
The terminal has the ability to fully load and unload oil carriers with a capacity of 2 million barrels.
In the same vein, firms shut down daily output of nearly 670,800 barrels and 726 million cubic feet (MCF) of natural gas by the midday on Tuesday, according to the Bureau of Safety and Environmental Enforcement.
Adding to the market support, the further drop in Iran’s crude shipments in the first week of October, according to Refinitiv Eikon data and an industry source, in a sign that importers of Tehran’s supplies sought alternatives before US sanctions against the oil-rich nation take effect on 4 November.
It is worth noting that industry data and official figures pertaining to the US oil stockpiles would be released one day later than usual this week because of a public holiday on Monday.
The American Petroleum Institute (API) is due to release its figures later on Wednesday, as the US Energy Information Administration (EIA) would issue its report on Thursday.
