Price History
- West Texas Intermediate crude for October delivery (CL00, +0.81% CL.1, +0.81% CLV23, +0.81%) increased by 56 cents, or 0.7%, reaching $80.66 per barrel on the New York Mercantile Exchange.
- October Brent crude (BRNV23, +0.78%), the global benchmark, was up 64 cents, or 0.8%, at $85.06 per barrel on ICE Futures Europe. The most actively traded contract, November Brent (BRN00, +0.74% BRNX23, +0.74%), advanced by 65 cents, or 0.7%, reaching $85.07 per barrel.
Market Drivers
The National Hurricane Center issued a warning early Tuesday that Hurricane Idalia is expected to intensify into an "extremely dangerous major hurricane before landfall along the west coast or Big Bend region of Florida."
According to a note from Ipek Ozkardeskaya, senior analyst at Swissquote Bank, oil prices stabilized due to concerns that the storm could impact crude production in the Gulf Coast.
Throughout the summer, crude prices have rallied in response to supply cuts from the Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies (referred to as OPEC+). The voluntary production cut of 1 million barrels a day by Saudi Arabia, which began in July and will continue at least through September, has been a significant support for these prices.
However, worries about the global economic outlook have kept a lid on further price increases. China's economic data has consistently fallen short of expectations, and concerns about demand from the world's second-largest crude consumer have been amplified by troubles in the country's property sector.
Additionally, Federal Reserve Chair Jerome Powell indicated last week that there may be a need for further interest rate increases to combat inflation. This has dampened hopes for a "soft landing," where a recession or sharp economic slowdown is avoided.
