Oil Prices Decline As Hurricane Risk Fades, China Demand Weakens

Oil prices retreated in Friday’s session as fears of damage on oil and gas infrastructure in the U.S. Gulf by Hurricane Rafael receded.

Concerns about weakening demand in China have also contributed to the oil price decline, after data showing crude imports in China fell 9% in October. That marked the  sixth consecutive month that imports by the world’s largest oil importer declined on a year-over-year basis. Brent crude for January delivery was down 2.7% to trade at $73.76 a barrel at 11.40 am ET while WTI crude for December delivery fell 2.9% to trade at $70.28 per barrel.

“The weakening of oil imports in China is due to weaker demand for oil as a result of the sluggish economic development and rapid advance of e-mobility,” Commerzbank analyst Carsten Fritsch told Reuters.

Oil markets witnessed choppy trading in Wednesday’s session, with oil prices declining in the intraday session before jumping after Donald Trump defeated Kamala Harris to clinch leadership of the White House.The mixed reactions by oil markets are not hard to decipher. On one hand,  U.S. oil producers are looking forward to fewer regulations on crude production under a Trump presidency, meaning higher oil supply and consequently lower prices. On the other hand, a Trump win also means more sanctions on Iranian and Venezuelan barrels, potentially boosting prices.

Whereas the ongoing hurricane season has contributed  to large oil price rallies in recent months, the extreme weather is proving very costly for energy companies. On Thursday, North Carolina giant electric utility, Duke Energy Corp. (NYSE:DUK), has provided estimates that the total cost to restore facilities damaged by Hurricanes Debby, Milton and Helene could fall in the range of $2.4 billion to $2.9 billion. According to CEO Lynn Good, tens of thousands of the company’s customers were left without power after Helene ripped away transmission lines and power poles, but the company managed to restore 5.5 million outages during the “historic storm season”.

Duke Energy made the announcement during the company’s third quarter earnings call.