Oil prices rebound following 3% drop in previous session

By Duygu Alhan

Oil prices partially recovered on Wednesday after plummeting around 3% late Tuesday, falling below $70 per barrel for the first time since December 2021 with data indicating a slowdown in economic activity in the US and China, the world's top oil-consuming countries.

International benchmark Brent crude increased by 0.4% to $69.81 per barrel at 09.15 a.m. local time (0615 GMT), up from the previous session's close of $69.52.

US benchmark West Texas Intermediate (WTI) rose 0.04% to $65.82 per barrel after closing at $65.79 in the prior session.

Downward price movements were influenced by OPEC's revision to its global oil demand growth forecast for this year and 2025. The group lowered its forecast by 80,000 bpd for this year from the previous month's assessment. The group lowered its demand forecast by 40,000 bpd for 2025.

However, prices started to compensate for the loss in the previous session in early trading on Wednesday. The concern that oil production would be interrupted due to severe weather in the US supports the partial rise in prices.

The storm, which started in the Gulf of Mexico on Monday, turned into a "Category 1 hurricane" last night and might impact some states in the US, the US National Hurricane Center said on Tuesday.

Meanwhile, concerns that there might be interruptions in oil and natural gas production also support upward price movements. The US Bureau of Security and Environmental Enforcement (BSEE) said Tuesday that about 24% of crude oil production and 26% of natural gas production in the US Gulf of Mexico were offline due to the storm.