Oil drops when the IMF reduces growth prospects; eyes on the hurricane

LONDON (Reuters) – Oil prices fell on Wednesday after the IMF lowered its global growth forecast, but markets were supported by Hurricane Michael's move to Florida, causing the closure of nearly 40 % of US crude oil production in the Gulf of Mexico.

The Brent LCoC1 benchmark was down 25 cents to 84.75 dollars a barrel at 07:35 GMT after a gain of 1.3% on Tuesday. US light crude CLc1 was 25 cents lower at $ 74.71.

The International Monetary Fund has revised down its forecast of global economic growth for 2018 and 2019 on Tuesday, raising fears that demand for petroleum products will also plummet.

Trade tensions and rising import tariffs are weighing on international trade, while emerging markets are facing tighter financial conditions and capital outflows, the IMF said.

"Prices are reaching their peak at the best of times given the dwindling global growth story," said Stephen Innes, APAC Trade Manager at OANDA in Singapore.

In the United States, nearly 40% of daily crude oil production was lost Tuesday in US offshore wells in the Gulf of Mexico due to platform evacuations and traffic jams that preceded Hurricane Michael.

According to the latest opinion of the US National Hurricane Center, Michael has become a hurricane category 4 "extremely dangerous".

Oil producers evacuated 75 platforms as the storm swept through the center of the Gulf en route for Wednesday's landing on the Florida Panhandle.

The country's largest private oil terminal, the Louisiana Offshore Oil Port, announced Tuesday it had halted the operations of its marine terminal.

This facility is the only US port capable of fully loading and unloading tankers with a capacity of 2 million barrels of oil.

Businessmen interrupted Tuesday production of some 670,800 barrels of oil and 726 million cubic feet of natural gas, according to the offshore regulator of the Office of Safety and Environmental Protection.

Raw supply is also a concern in the Middle East.

Iran's crude oil exports fell further in the first week of October, according to data provided by oil companies and an industrial source, as buyers seek alternatives before US sanctions come in. in force on 4 November.

Industry and government data on US crude inventories will be delayed one day this week due to a Monday holiday. The American Petroleum Institute is scheduled to release the data on Wednesday, while the US Energy Information Administration is scheduled to be released on Thursday.