LONDON — Oil prices hit a six-week high on Tuesday as Hurricane Nicholas weakened into a tropical storm, bringing the threat of widespread floods and power outages to Texas and Louisiana, and as the International Energy Agency forecast a big demand rebound for the rest of the year.
Brent crude was up 55 cents, or 0.8%, at $74.06 a barrel by 1334 GMT after hitting a session high of $74.28. U.S. West Texas Intermediate (WTI) crude climbed 51 cents, or 0.7%, to $70.96 after touching a high of $71.22.
Both contracts have risen for three consecutive sessions and were trading at their highest since early August.
Nicholas is the second major storm to threaten the U.S. Gulf region in recent weeks. Hurricane Ida killed more than two dozen people in August.
Evacuations were under way on Monday from offshore oil platforms in the area while onshore oil refiners also prepared for Nicholas.
“The substantial production outages in the Gulf of Mexico remain one of the factors driving prices,” Commerzbank said.
About 794,000 barrels per day (bpd), or more than 40% of the U.S. Gulf’s oil and gas output, remained offline on Monday, two weeks after Ida slammed into the Louisiana coast, according to offshore regulator Bureau of Safety and Environmental Enforcement (BSEE).
After three months of decline in global oil demand, rollouts of COVID-19 vaccines are set to rekindle appetite for oil that was suppressed by pandemic restrictions, especially in Asia, the International Energy Agency (IEA) said on Tuesday.
The IEA sees a 1.6 million bpd demand rebound in October and continued grwoth until the end of the year.
Overall, the agency lowered its 2021 global oil demand growth forecast by 105,000 bpd to 5.2 million bpd but raised its 2022 figure by 85,000 bpd to 3.2 million bpd.
These forecasts are well below those of the Organization of the Petroleum Exporting Countries (OPEC), which expects demand to grow by about 5.96 million bpd this year and 4.15 million bpd next year.
Protesters blocked an oil tanker from loading at the Libyan terminal of Es Sider on Tuesday, the National Oil Corporation (NOC) media office and an engineer at the port said.
Details on China’s plans to sell crude from its strategic reserves served to dampen price gains on Tuesday.
China’s state reserves administration said it would auction about 7.38 million barrels of crude on Sept. 24, marking the first batch of sales in a rare release of strategic inventories.
(Reporting by Ahmad Ghaddar Additional reporting by Yuka Obayashi in Tokyo Editing by Jason Neely and David Goodman)