U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower early Wednesday after the International Monetary Fund (IMF) lowered its global growth forecasts. However, prices remained underpinned as Hurricane Michael barreled towards northwestern Florida, causing oil producers to shut down nearly 40 percent of U.S. Gulf of Mexico crude output.
Demand Concerns Raised
The IMF downgraded its global economic growth forecasts for 2018 and 2019 on Tuesday, potentially tempering demand for oil and its products.
Trade tensions and rising import tariffs were taking a toll on commerce, while emerging markets struggle with tighter financial conditions and capital outflows, the IMF said.
Supply Side Worries
CNBC is reporting that in the United States, nearly 40 percent of daily crude oil production was lost from offshore U.S. Gulf of Mexico wells on Tuesday because of platform evacuations and shut-ins ahead of Hurricane Michael.
Concerns over Iran and OPEC are likely to take a backseat today as crude traders continue to monitor the movement of Hurricane Michael. If the storm veers left then it should hit the Florida panhandle today. Oil producers in this area evacuated personnel from 75 platforms.
If the storm veers left then it could disrupt operations along the Louisiana shoreline. The country’s largest privately owned crude terminal, the Louisiana Offshore Oil Port LLC, said late on Tuesday it had halted operations at its marine terminal.
According to the Bureau of Safety and Environmental Enforcement, companies turned off daily production of about 670,800 barrels of oil and 726 million cubic feet of natural gas by midday on Tuesday.
Later today, investors will get the opportunity to react to the latest data from the American Petroleum Institute. The U.S. Energy Information Administration will release its weekly data on Thursday.
This article was originally posted on FX Empire
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