Oil prices fell during trading on Tuesday, amid conflicting signals between weak demand from China, monitoring the repercussions of Hurricane Francine on production, and OPEC reducing its forecast for global oil demand growth in 2024.
Brent crude futures fell below $70 a barrel for the first time since December 2021.
US crude futures also fell by more than 5% to $65.56 a barrel.
The US Coast Guard ordered all operations in Brownsville and other small ports in Texas to close on Monday evening as Tropical Storm Francine approached the Gulf. The port of Corpus Christi remained open, but with some restrictions.
The tropical storm is expected to intensify significantly over the next two days, with expectations of turning into a hurricane, according to the National Hurricane Center.
In addition, Exxon Mobil decided to suspend production at its offshore platform in Hoover, and Shell suspended drilling operations at two platforms. Chevron also began shutting down oil and gas production at two of its offshore platforms.
“At least 125,000 barrels per day of oil capacity is at risk of being disrupted,” analysts at ANZ Bank said in a note, citing data from the National Hurricane Center.
However, signs of weak global demand and expectations of a continued oil oversupply weighed on the market.
OPEC, for its part, cut its forecast for global oil demand growth by 80,000 barrels per day to 2 million from 2024. It also cut its forecast for global crude demand growth by 40,000 barrels per day to 1.7 million from 2025.
Both benchmarks settled down about 1% on Monday.
