Oil Creeps Higher as Markets Weigh Hurricane-led Supply Disruptions

By Ambar Warrick 

Investing.com-- Oil prices rose slightly on Tuesday as markets weighed potential supply disruptions from Hurricane Ian, although a worsening outlook for crude demand kept prices pinned at near nine-month lows.

Major crude producers BP PLC (NYSE:BP) and Chevron Corp (NYSE:CVX) said that they had cut production at some offshore oil platforms in the Gulf of Mexico in anticipation of Hurricane Ian. Ian is now classified as a category two storm, and is expected to become a major hurricane within two days. 

Other producers, including Occidental Petroleum Corporation (NYSE:OXY) and Hess Corporation (NYSE:HES), said they were monitoring the situation and implementing some measures, although it was unclear whether supply would be reduced. 

Ian is expected to move across the Gulf of Mexico and make landfall in Florida later this week. The region accounts for about 15% of U.S. crude supply. 

The prospect of some tightening in supply benefited oil prices, which have fallen sharply this month on concerns that rising interest rates will dent economic activity and slow crude demand. 

London-traded Brent oil futures, the global benchmark, rose 0.5% to $83.20 a barrel, while U.S. West Texas Intermediate futures, the U.S. benchmark, rose 0.4% to $77.05 a barrel by 20:47 ET (00:47 GMT). 

Both contracts plummeted nearly 4% each on Monday, rattled by a rapidly strengthening dollar and fears of a pronounced economic slowdown in Europe. 

Oil prices are now headed for a 27% loss in the third quarter, as hawkish signals from the Federal Reserve and other central banks eroded the outlook for economic activity this year. 

Still, mild gains in oil may indicate that near-term selling pressure on the space has eased, albeit momentarily. The dollar, which traded near 20-year highs on Tuesday, is expected to race even higher as the Fed keeps hiking interest rates. 

Focus is now on an address by Fed Chair Jerome Powell, due later this week, for more cues on the path of U.S. monetary policy. 

Oil prices have tumbled sharply this year from highs hit during the onset of the Russia-Ukraine war. 

But a potential escalation in the conflict, as Russia mobilized more troops, could disrupt crude supply and support prices. The prospect of a harsh European winter could also shore up demand for heating oil. 

Still, crude prices have to contend with growing concerns over slowing economic growth in the near-term, especially as global interest rates keep rising.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    London
    EC2A 2BN
    United Kingdom


    T:  + 44 ( 0 ) 203 857 2000
    E:  info@ofmarkets.com
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    Dubai
    United Arab Emirates
     
    T: + 00 971 44 22 888
    E:  info@ofmarkets.com
     

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: