By Georgina McCartney
Oil prices remained stable in early trading on Tuesday, as investors assessed the impact of supply disruptions caused by Tropical Storm Francine and the ongoing challenges posed by sluggish Chinese demand.
Crude oil futures edged up by 0.22% to $72.00 a barrel, while U.S. West Texas Intermediate crude futures rose by 0.17% to $68.83 a barrel.
Major oil companies such as Exxon Mobil, Shell, and Chevron have already taken precautionary measures by shutting down production platforms in the Gulf of Mexico in anticipation of the storm's impact.
Despite these disruptions, global commodity traders Gunvor and Trafigura foresee oil prices hovering between $60 and $70 per barrel due to weakened Chinese demand and oversupply in the market.
Experts at the Asia Pacific Petroleum Conference highlighted China's decreasing appetite for oil as the country transitions to cleaner energy sources and grapples with a slowing economy.
Goldman Sachs' head of oil research, Daan Struyven, noted that China's annual demand growth has significantly decreased from pre-pandemic levels, putting further pressure on refining margins in Asia.
Overall, the combination of supply disruptions from Tropical Storm Francine and subdued Chinese demand continues to weigh on oil prices, making it a challenging time for the industry.