Update on the oil market situation today:
As far as the oil market situation is concerned, we note that crude prices stabilized yesterday, Tuesday, September 14, at their highest level in over a month and a half. Prices were boosted by production disruptions in the United States due to the hurricane season.
For example, a barrel of North Sea Brent crude for November delivery ended the session at $73.60 in London, up 0.12% or 9 cents from Monday's close.
On the other side of the Atlantic, in New York, U.S. WTI crude for October delivery ended the session at $70.46, up 0.01%.
Earlier in the session, Brent crude reached $74.23 and WTI crude $71.14 per barrel, the highest levels since early August.
The causes of this rise in oil in detail:
The explanations for this rise in prices are to be sought on the side of Hurricane Ida which hit the Gulf of Mexico two weeks ago, disrupting production again today. The equipment that usually provides 39.57% of the region's production was still shut down yesterday, but a new threat is emerging.
Hurricane Nicholas made landfall in Texas on Tuesday morning and the National Hurricane Center warned of heavy rains and a risk of flash flooding. This forced producers to evacuate non-essential personnel from oil and gas platforms. The weekly U.S. stockpile data is expected to show a significant drop in crude oil and gasoline inventories. Between the loss of production caused by Hurricane Ida and the current challenges regarding Hurricane Nicholas, this may keep the global oil situation in a position of supply versus demand.
On the longer term, the International Energy Agency or IEA said in its monthly report on Tuesday that it expects a strong rebound in global oil demand after 3 months of contraction this summer due to the resurgence of Covid cases in Asia. Indeed, there are signs that Covid cases are declining and demand is expected to rebound strongly by 1.6 million barrels per day in October and continue to grow through the end of the year.