The U.S. National Hurricane Center announced that Hurricane Rafael, which has led to the shutdown of 391,214 barrels per day of U.S. crude oil production, is expected to weaken in the coming days and gradually move away from the offshore oil fields in the U.S. Gulf. The storm helped prices higher earlier in the week.
Downward pressure on prices is also driven by data showing that crude oil imports in China, the world’s largest oil importer, fell by 9% in October—the sixth consecutive month of year-over-year decline. China launched a new round of financial support on Friday, announcing a package aimed at easing debt repayment strains for local governments. The country’s economy is facing significant downward pressures due to weak domestic demand, a real estate crisis, and increasing financial strains on indebted local governments, which limit their ability to invest.
On the bullish side, the most significant news of the week was Donald Trump’s victory in the U.S. presidential election. The Republicans also winning control of the Senate and the House of Representatives.
Historically, Trump’s policies have been pro-trade, which is likely to support overall economic growth and increase demand for fuel.
In addition, there have already been reports suggesting that the stricter enforcement of U.S. sanctions on Iran under Trump could deprive China of the cheap Iranian oil it has been interested in in recent years. This would be bullish for prices overall, unless OPEC begins to reduce its supply cuts.
At the same time, Trumps pro-oil and gas position would suggest his administration would encourage more U.S. oil and gas production, which would have to opposite effect on prices. Some analysts, however, believe that there may be fewer and milder changes in U.S. federal policies.
Libyan oil production has fully recovered following the announcement last week by both the eastern-based government and the Tripoli-based National Oil Corp (NOC) that all oilfields and export terminals have reopened. Prior to the suspension of production at the Sharara, El Feel, and Essider oilfields in late August, Libya was producing around 1.2 million barrels of crude per day.
OPEC+ producers, who have been voluntarily reducing production and who had planned to start easing some of the output cuts in December 2024, announced on Sunday that they will now delay the supply increase by one month, pushing it to January 2025.
Russian data show the nation’s crude production in October was nearly in-line with its OPEC+ quota. The country pumped 8.973 million barrels a day of crude last month, up by around 3,000 barrels a day compared with September, and just 5,000 barrels a day above the nation’s quota for the month.