Key information
- Oil prices fell more than 2 percent on Friday.
- Easing concerns over supply disruptions caused by Hurricane Rafael contributed to the decline.
- China's economic stimulus measures have failed to generate enthusiasm among oil traders.
Oil prices fell more than 2 percent on Friday, mainly due to waning concerns over supply disruptions caused by Hurricane Rafael and mixed reactions to China's recent economic stimulus measures.
US West Texas Intermediate futures closed at $70.35 a barrel. Brent oil futures fell to $73.87 per barrel.
Supply disruptions
Energy companies in the US Gulf of Mexico had proactively shut down more than 23 percent of their oil production in anticipation of Hurricane Rafael. However, the revised forecast indicated a less severe impact on production as the storm is expected to remain centered in the Gulf for the next five days. Analyst Alex Hodes of StoneX noted that the diminishing threat of supply interruptions due to Hurricane Rafael contributed to the price decline.
China's latest economic stimulus plan, aimed at easing the debt burden on local governments, has failed to generate significant enthusiasm among oil traders. Giovanni Staunovo, an analyst at UBS, explained that market participants had anticipated more direct measures to stimulate demand, which led to disappointment and falling prices.
Long-term pressures on oil prices
Deflationary pressures within the Chinese economy have been a persistent factor weighing on oil prices throughout the year. Customs data for October revealed a sixth consecutive month of year-on-year declines in China's crude oil imports.
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