Oil Price Fundamental Daily Forecast – Production Losses Offsetting Concerns Over Weak Demand

US West Texas Intermediate and Brent Crude Oil Futures with international benchmarks will trade higher on Thursday. This is supported by production shutdowns in the US Gulf of Mexico and the prospect of further supply losses in Norway, as well as hopes for some help with US coronavirus aid. The news offsets yesterday's bearish weekly inventory report from the US Energy Information Administration (EIA).
At 09:17 GMT, December WTI crude is trading at $ 40.83, down $ 0.60, or -1.49%, and December Brent crude is trading at $ 42.69, which is one A decrease of $ 0.70 or -1.67%.
Hurricane concerns
Oil and gas workers have withdrawn from offshore production facilities in the U.S. Gulf as the Hurricane Delta is expected to exacerbate into a major Category 3 storm. Almost 1.5 million barrels of daily production were stopped.
There are some predictions that cooler water temperatures in the northern Gulf could weaken the pre-dumping storm. If Delta weakens, the rally could fail.
Strike in Norway continues
Oil was also helped by the prospect of further production stoppages in the North Sea due to a workers' strike. The Johan Sverdrup field, the largest in the North Sea, will have to cease production unless the strike ends on October 14th.
The strike could shut off nearly a quarter of the country's oil production by October 14, operators said, increasing the prospect of further price hikes in the international oil market.
Six offshore oil and gas fields were closed on Monday as Lederne stepped up its strike and reduced production capacity by 8%, or around 330,000 barrels of oil equivalent per day (boepd), the Norwegian Oil and Gas Association (NOG) said.
Another six oil and gas fields, including the Ekofisk platform, could close in whole or in part by October 14, the industry said.
The largest outage would be Equinor's John Sverdrup oil field, the largest in the North Sea with a production capacity of up to 470,000 barrels of oil per day, Equinor said on Wednesday.
US Energy Information Administration weekly inventory report
US crude oil inventories rose slightly, as expected, while gasoline and distillate inventories fell last week, the Energy Information Administration said on Wednesday.
Crude oil inventories rose 501,000 barrels to 492.9 million barrels in the week ending October 2, compared with analysts' expectations in a Reuters poll for an increase of 294,000 barrels.
US gasoline inventories fell 1.4 million barrels for the week to 226.80 million barrels, their lowest level since November last year, compared to expectations for a 471,000 barrels decline.
As expected, the distillate stocks decreased by 962,000 barrels.
Daily forecast
WTI and Brent crude oil futures will soar as high as speculators are willing to take them on, keeping in mind that the effects of the hurricane will go away in about 3 to 4 days and the strike could end in 7 to 10 days . In other words, these will not be long-term bullish events.
Meanwhile, the U.S. stimulus plan is still in the air, demand for COVID-19 remains, global supply is high, and OPEC now faces a new challenge as production increases in Libya, an OPEC member that is exempt from the production cut.
All of the above should cap earnings and could bring prices down once the hurricane and strike hit the books.
In our economic calendar you will find all economic events of today.

This article was originally published on FX Empire
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