Oil prices traded slightly lower as market participants feared the IMF’s decision to cut global economic forecasts for 2018 and 2019, which could temper demand for oil and its products. The fund said in its updated World Economic Outlook that it was now predicting a 3.7% growth, down from the 3.9% growth it forecasted in July. It was the first downgrade since July 2016.
Oil prices traded higher during the prior sessions on worries of a hurricane swirling toward the oil-rich US gulf coast. In the Gulf, companies operating have shut down by nearly 20% of their oil p[roduction as Hurricane Michael is getting close to the region, where it was expected to make landfall on Wednesday as a Category 3 storm.
OPEC and the Iran sanctions are taking a backseat for the day as crude traders continue to monitor the movement of Hurricane Michael. According to the Bureau of Safety and Environmental Enforcement, companies turned off daily production of about 670,800 barrels of oil and 726 million cubic feet of natural gas by midday.
US WTI and UK Brent are seen trading lower for the day following the International Monetary Fund lowered its global growth forecasts. Although, prices remained supported as Hurricane Michael barreled towards northwestern Florida and caused oil production to shut down nearly 40% of US Gulf of Mexico crude production.
CNBC has been reporting that in the US nearly 40% of daily crude oil production was lost from offshore US Gulf of Mexico wells because of platform evacuations and shut-ins ahead o hurricane Michael.
New York-traded WTI crude futures trade at $74.80 a barrel. Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S. trades at $84.90 a barrel.