U.S. crude oil jumped more than 1% to trade above $68 per barrel on Thursday, after Hurricane Francine churned through the Gulf of Mexico, disrupting oil production before making landfall in Louisiana.
Oil futures rose more than 2% in the previous session as the storm threatened supplies.
"Hurricane Francine has likely disrupted about 1.5mn barrels of US oil production, which we estimate will reduce September production in the Gulf of Mexico by around 50,000bpd," Giovanni Staunovo, an analyst at UBS, told clients in a Thursday note.
Staunovo said the recent slump may be due to traders losing confidence in OPEC's ability to maintain compliance with production cuts at lower price levels.
UBS expects oil prices will continue to rise, at least the short term.
Persons:
Hurricane Francine, Francine, Giovanni Staunovo, Staunovo, Brent
Organizations:
UBS, bbl
Locations:
Gulf of Mexico, Louisiana, Gulf, Mexico, 50,000bpd