Thu Sep 12 00:39:16 UTC 2024: ## Oil Prices Rise for Second Day as Storm Disrupts Production and Traders Take a Break
**New York, NY** – Oil prices climbed for the second consecutive day on Thursday, fueled by a combination of supply disruptions and a temporary pause in heavy selling by algorithm-driven traders.
Hurricane Francine, now downgraded to a tropical storm, forced the shutdown of approximately 670,000 barrels per day of crude production in the Gulf of Mexico, representing over one-third of the region’s oil output. This supply disruption provided a significant boost to prices.
Meanwhile, commodity-trading advisors (CTAs), known for their algorithmic trading strategies, exhibited a notable shift away from recent aggressive selling. Stephen Roseme, managing member of Bridgeton Research Group LLC, noted, “We are not seeing selling in these markets, nor are there any meaningful orders close in Brent, WTI, and products.” While he anticipates potential future selling should the market resume a downward trajectory, Roseme believes that a near-term reprieve from CTA activity is evident.
West Texas Intermediate (WTI) gained over 2% to settle at nearly $69 per barrel, while Brent crude closed near $72 per barrel. This surge follows a period of heightened volatility, with Tuesday marking the highest level of price fluctuations in nine months.
Despite the recent gains, oil prices remain significantly lower for the year. Concerns surrounding slowing demand in China, the world’s largest oil importer, and signs of a weakening US economy continue to weigh on the market. The International Energy Agency (IEA) reinforced these concerns, projecting a decline in global oil demand growth as China’s economy cools. The IEA also anticipates an oil surplus in 2024, even if the OPEC+ group extends its supply cuts, which have already been eased by two months.
Looking ahead, experts believe the market is grappling with the potential overpricing of negative sentiment. Ole Hansen, head of commodities strategy at Saxo Bank, commented, “The market now needs to face the question of whether too much negativity has been priced in at current levels.”
Despite the positive impact of the storm, the market remains susceptible to further selling pressure as the effects of Francine diminish in the coming days. The overall outlook remains uncertain, hinging on the interplay of supply disruptions, trading algorithms, and global economic trends.
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