Crude oil prices rebounded on Friday, ending a four-week decline, with West Texas Intermediate (WTI) prices reaching $70 per barrel. The recovery was attributed to Hurricane Francine, which caused a temporary reduction in oil supply, removing approximately 700,000 barrels per day (b/d) from the market.
Libyan Production Remains Halted
In addition to the hurricane’s impact, Libyan oil production continues to be shut down following the collapse of UN-mediated talks. This adds to the total supply disruption, which now stands at 1.5 million b/d. However, with China’s economic outlook at its most pessimistic since the pandemic, oil prices, including Brent crude at $73 per barrel, may require more significant disruptions to rise further.
Hurricane Francine’s Impact on US Production
Hurricane Francine, a Category 2 storm, hit Louisiana, leading to the shutdown of 42% of crude oil and 53% of natural gas production in the US Gulf of Mexico. This shutdown equates to a loss of 730,000 b/d of oil and 992 million cubic feet per day (ft3/d) of natural gas.
Saudi Arabia Increases Oil Exports to China
In response to reduced demand from China, Saudi Aramco plans to increase its oil exports to the country in October. The expected volume is 46 million barrels, an increase of 3 million barrels from September.
Gold Prices Reach Record High
Gold prices hit an all-time high this week, driven by higher-than-expected US inflation and a decline in US Treasury yields and the US dollar. The price of gold reached a record $2,551 per ounce.
Scotland’s Grangemouth Refinery to Close in 2025
The Grangemouth refinery, Scotland’s only crude oil processing plant with a capacity of 150,000 b/d, is scheduled to close in the second quarter of 2025 after 100 years of operation. Operator Petroineos plans to convert it into a fuel import terminal.
UAE Invests in US Blue Hydrogen Project
The United Arab Emirates’ national oil company has confirmed a 35% stake in Exxon Mobil’s Baytown project, anticipating a final investment decision (FID) on the world’s largest blue hydrogen project in mid-2025.
Russia Considers Export Restrictions on Strategic Metals
Russian President Vladimir Putin has signaled that the country may limit exports of uranium, titanium, and nickel in response to Western sanctions. This has led to a 3% increase in the three-month LME nickel contract price to $16,150.
BlackRock Invests in Bahrain’s Pipeline Infrastructure
BlackRock has acquired a minority stake in a pipeline connecting Bahrain to Saudi Arabia’s oil infrastructure for an undisclosed amount. This follows a previous investment of $4 billion in ADNOC’s pipeline business.
US Refineries Suffer Minimal Damage from Hurricane Francine
US Gulf Coast refinery output, including Louisiana’s 3 million b/d capacity, has been largely unaffected by Hurricane Francine. Refineries such as Shell’s Norco and Citgo’s Lake Charles have reported no damage and have resumed normal operations.
Russian Crude Prices Fall Below G7 Price Cap
For the first time since January, the price of Russia’s main export grade, Urals, fell below the G7 price cap of $60 per barrel. This could lead to increased utilization of Greek shipping companies.
Argentina Reduces Energy Subsidies
The Argentine government has cut energy subsidies by $2.7 billion in the first seven months of 2024, achieving an energy trade balance surplus of $2.9 billion during the period.
Uzbekistan Begins Refining Taliban-Produced Oil
Uzbekistan’s Saneg has signed a deal with Afghanistan’s Taliban government to refine Afghan crude oil at its 40,000 b/d Fergana refinery. This follows Chinese investments in upstream production in the region.
Australia Launches Hydrogen Strategy
Australia’s federal government has launched a hydrogen strategy aiming for 15 million tonnes per year of green hydrogen production by 2050, with an initial target of 0.5 million tonnes per annum (mtpa) by 2030.
Detroit Refinery Allowed to Increase Production
The Detroit refinery operated by Marathon Petroleum has received a new air permit from Michigan’s environmental agency, allowing it to increase its production capacity beyond the previous limit of 140,000 b/d, provided it reduces emissions.