Oil prices fall as Gulf of Mexico rigs survive tropical storm
Oil prices have fallen after production resumed on platforms in the Gulf of Mexico as a predicted hurricane avoided the area.
Prices had jumped yesterday as a number of oil platforms in the Gulf of Mexico were evacuated in preparation for a forecasted hurricane, with Brent Crude oil reaching close to $80 per barrel – its highest since May.
US sanctions against Iran's oil sector had also contributed to the rise.
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But the Gulf Coast survived the storm, which headed east earlier today, and crude oil prices fell back towards $77 per barrel.
Analysts said weaker demand from China and emerging markets – as well as Saudi Arabia's ongoing oil production expansion – could weigh further on oil prices.
Fawad Razaqzada, market analyst at forex.com, said crude oil prices “took a nosedive” yesterday, which had continued into today.
He said: “Chinese demand fears may be a factor finally exerting downward pressure on oil prices. In recent months, metal prices have tanked mainly on concerns over slower demand from China.”
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“What’s more, Saudi Arabia has been expanding its oil production, which in August climbed to 10.424m barrels per day compared to 10.288m barrels per day in July.”
Though crude prices could gain support if this week's US inventory reports show a drop in crude stocks, as expected.