At the beginning of the Asian market on Friday (September 13th), international oil prices were hovering at a nearly one week high, with US crude oil currently trading around $69.38 per barrel. Oil prices rose about 2% on Thursday as producers assessed the impact on oil production in the US Gulf of Mexico, after Hurricane Francine ravaged the offshore oil region and was subsequently downgraded to a tropical storm.

The US Bureau of Safety and Environmental Enforcement (BSEE) reported that over 730000 barrels per day (nearly 42%) of oil production in the Gulf of Mexico was shut down on Thursday due to the impact of Hurricane Francine.

US crude oil futures rose $1.66, or 2.5%, on Thursday, settling at $68.97 per barrel. Brent crude oil futures rose $1.36, or 1.9%, to $71.97 per barrel.

Both major contracts saw gains of over 2% on Wednesday, as some companies withdrew from offshore oil platforms due to the influence of Francine. UBS analysts estimate that these disruptions will reduce production in the Gulf of Mexico by approximately 50000 barrels per day this month.

The US Bureau of Safety and Environmental Enforcement (BSEE) announced on Thursday that approximately 39% of crude oil production and 49% of natural gas production in the Gulf of Mexico were shut down on Wednesday as Hurricane Francine approached the Louisiana coast.

BSEE reported on Thursday that offshore producers have shut down nearly 675000 barrels per day of oil and 907 million cubic feet of natural gas production. BSEE stated that a total of 171 platforms were evacuated, accounting for 46% of the total number of offshore platforms.

Market participants are also closely monitoring a weeks long crisis of control over the Libyan central bank, which has led to a decrease in the country's oil production and exports. A preliminary agreement was reached last week to resolve the crisis, but the situation remains unstable.

The geopolitical situation is also providing support for oil prices. Ukraine accused Russia on Thursday of using strategic bombers to launch missile attacks on a civilian grain ship in the Black Sea waters near NATO member Romania.

Ukrainian President Volodymyr Zelenskiy stated that the ship transporting Ukrainian grains to Egypt was attacked by Russian missiles after leaving Ukrainian territorial waters. He said there were no casualties.

The US Ambassador to Ukraine strongly condemns the attack and holds Russia responsible for it. The UN spokesperson said that this incident "serves as a stark reminder" that civilian ships still face threats in the Black Sea.

The Ukrainian Navy reported that Russian Tupolev-22 bombers launched several cruise missiles on Wednesday, 2002 GMT. This is the first time since Moscow began its invasion in February 2022 that missiles have hit civilian ships transporting grain by sea.

Traders say that this incident has heightened concerns about supply shortages in the Black Sea export zone, leading to a strengthening of wheat prices. US futures rose as high as 2%, hitting a two month high. This provides upward momentum for oil prices.

However, some analysts warn that Francine's impact may be short-lived, as it quickly became less strong after landing in Louisiana on Wednesday evening. StoneX analyst Alex Hodes told clients in a report that this could redirect the attention of the oil market back to global demand shortages.

Oil and fuel export ports from southern to central Texas reopened on Thursday, and refineries are also intensifying production.

The United States, the world's largest oil consumer, has also shown signs of weak demand. According to data from the US Energy Information Administration (EIA) on Wednesday, US oil inventories increased last week as crude oil imports increased, exports decreased, and fuel demand declined.

The International Energy Agency (IEA) announced in its monthly oil market report on Thursday that it has lowered its forecast for oil demand growth in 2024 by 70000 barrels per day, or 7.2%, to 900000 barrels per day.

The IEA believes that the slowdown in demand from major Asian countries is the main reason for the weakening of global demand growth. Currently, it is expected that with the macroeconomic slowdown and the popularization of electric vehicles, the oil demand of major Asian countries will only increase by 180000 barrels per day in 2024.

The IEA said, "As the driving force for the growth of oil demand in major Asian countries seems to have been exhausted, and the demand growth in most other countries is not significant or even declining, the current trend reinforces our expectation that global demand will remain stable by the end of 2030

Due to differences in the pace of transition towards clean fuels among major Asian countries and the world, there are also significant differences in the forecast for demand growth in 2024. The Organization of the Petroleum Exporting Countries (OPEC) also lowered its forecast for 2024 this week, but its forecast is still much higher than the IEA's.

OPEC expects oil demand to increase by 2.03 million barrels per day in 2024 and 1.74 million barrels per day in 2025, but consecutive downward revisions also highlight OPEC's challenges in balancing the market.

The IEA maintains its demand growth forecast for 2025 at 950000 barrels per day, but believes that if OPEC+oil producing countries continue their plan to withdraw from voluntary production cuts, the global oil market may experience oversupply next year.

The IEA stated that the increase in production from non OPEC oil producing countries will drive global supply growth. It is expected that non OPEC oil supply will increase by 1.5 million barrels per day in the next two years, and production from the United States, Guyana, Canada, and Brazil will increase.

HSBC stated that OPEC+could potentially harm oil prices regardless of whether voluntary supply restrictions are relaxed in the coming months. If OPEC+cancels production cuts, it may lead to a return to a massive oversupply by 2025; On the other hand, while maintaining production cuts may initially contribute to price increases, this move could also be seen as an implicit acknowledgement of weak global demand growth.

This trading day, we will pay attention to the changes in the US crude oil drilling data, the US import price index in August, the initial value of the US University of Michigan consumer confidence index in September, the Eurozone finance ministers meeting, and the relevant news of the geopolitical situation.

From a technical perspective, US crude oil has held onto the support of the low point in nearly three years and launched a rebound, weakening bearish signals in the future. The KDJ is running at a low golden cross, and there is a further opportunity for short-term oil prices to rebound. The initial resistance reference is around the 70 level and the high point of 71.46 on September 4th; Pay attention to the support around the 5-day moving average of 67.99 below.

Continuous daily chart of US crude oil