Brent crude futures were little changed in early Asian trading as market participants prepared for an expected Tropical Storm Francine in the U.S. Gulf of Mexico.
As of 12:00 Beijing time, the November contract of Brent crude oil was quoted at US$71.77 per barrel, down 7 cents from the settlement price on September 9, when the contract rose US$0.78 from the previous trading day.
The October contract for crude oil on the New York Mercantile Exchange was quoted at $68.59 per barrel, down 12 cents from the settlement price on September 9. On that day, the contract rose $1.04 from the previous trading day.
Oil companies in the U.S. Gulf of Mexico have begun evacuating employees and suspending some operations as a hurricane expected later this week approaches.
Tropical Storm Francine is expected to strengthen into a hurricane as it moves north toward the Texas and Louisiana coasts by mid-week, threatening an offshore region that accounts for about 15% of U.S. crude oil production and 5% of natural gas output.
According to a shipping agent, at noon EST on Sept. 9, the ports of Corpus Christi, Freeport, Houston, Galveston, Texas City, Beaumont and Port Arthur in Texas, and Cameron and Lake Charles in Louisiana were under a state of emergency, meaning high winds were expected within 48 hours.
Under the state of emergency, all commercial traffic and transshipment operations can continue, but the Coast Guard said ocean-going commercial vessels over 500 gross tons should plan to leave port or request permission from authorities to remain in port.
Ben Lucock, global head of oil at Trafigura, said oil prices could fall to the $60 to $70 a barrel range “relatively soon”, while Gunvor CEO Thorbjorn Tornqvist added that $70 a barrel was a “fair value”.
“We are currently at the $72 level... and there is reason to suspect we could be in the $60 range soon,” Lucock said at the S&P Global Commodity Insights Asia Pacific Petroleum Conference (APPEC) in Singapore on Sept. 9.
Tornquist expressed a similar view, arguing that an oil supply glut due to production exceeding demand could put pressure on prices in the short term, with the oversupply situation expected to worsen in the coming years.
Morgan Stanley has cut its short-term crude oil price forecasts, saying it does not expect the supply-demand balance to improve in the coming quarters. The bank now predicts that Brent and WTI prices will stabilize at $75 and $70 per barrel, respectively, for the rest of the year and into 2025.
(The above content comes from the latest views of Argus, an independent international energy and commodity price assessment agency)
Article forwarded from: Jinshi Data
