Hurricane triggers short covering in crude, Cushing inventories continue to decline; WTI crude prices surged over 3% intraday

Goldman Sachs: The disconnect between physical and futures markets for oil is "unprecedented."

Hurricane Francine threatens Louisiana, prompting the closure of some oil facilities in the Gulf of Mexico, which in turn has led to short-covering and a temporary halt in the aggressive decline of oil prices seen since late August. EIA data for the past week showed an unexpected increase in crude oil inventories, but Cushing stocks fell by over a million barrels.

Goldman analysts highlighted the anomaly behind the recent drop, noting that while financial demand for oil has hit a historic low, physical demand remains robust, and net supply is decreasing. Goldman expects Brent crude to average $77 per barrel next quarter, implying a nearly 12% rebound from current levels.