Investing.com — Oil prices rose Tuesday, boosted by the potential for supply disruptions as Idalia strengthens to hurricane force as it heads towards Florida.
By 09:15 ET (13:15 GMT), the futures traded 0.1% higher at $80.17 a barrel, while the contract climbed 0.2% to $84.06.
Idalia threatens supply disruptions
Tropical Storm Idalia has now strengthened and is expected to “rapidly intensify” and could become a powerful Category 3 hurricane before it makes landfall tomorrow in Florida, the National Hurricane Center said Tuesday.
This is likely to impact crude production on the eastern side of the U.S. Gulf Coast, further tightening supply as the U.S. summer driving season draws near to its close.
The U.S. market has already been hit by a fire at a Marathon Petroleum (NYSE:) refinery last week, impacting production at the refinery at Garyville, Louisiana, the third largest in the United States.
“The driving force behind the oil sector remains the anticipation of a fuel supply deficit in the latter part of the year, a situation that is unfolding at present,” said Andrey Goilov, an analyst at RoboForex.
Data deluge throughout week
Still, gains are limited as oil demand worries fester in the world’s two biggest economies – the U.S. and China.
There is an abundance of economic data to digest this week to provide future clues, starting with U.S. later in the day.
A second reading on second-quarter U.S. growth is due on Wednesday, while readings on – the Federal Reserve’s preferred inflation gauge – are due on Thursday, and August data are expected on Friday.
Federal Reserve Chair on Friday said the U.S. central bank may need to raise rates further to cool stubborn inflation, which would potentially hit economic activity in the world’s largest economy, weighing on demand for crude.
In China, purchasing managers’ index data are due on Thursday and Friday, and are likely to shed more light on business activity in the world’s largest oil importer.
The Asian giant’s faltering post-pandemic economic recovery has weighed on the crude markets this year, given the second largest economy in the world was expected to make up a lot of the crude demand growth this year.
(Ambar Warrick contributed to this item.)
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