04:12 PM EDT, 09/17/2024 (MT Newswires) -- Global oil supply disruptions and an imminent monetary policy easing by the US central bank are pushing crude futures' prices higher, though concerns around demand persist amid weakness in China, Rystad Energy said.

West Texas Intermediate crude oil was up 1.7% at $70.16 a barrel in Tuesday late-afternoon trade, while Brent rose 1.5% to $73.88. Both WTI and Brent saw gains last week following several weeks of declines.

Brent topped $73 a barrel Monday amid supply disruptions in the Gulf of Mexico from Hurricane Francine and expectations of an interest-rate cut by the US Federal Reserve, Rystad senior analyst Svetlana Tretyakova said in a note to clients. The hurricane could lead to a 1.8-million-barrel production loss in the Gulf of Mexico over 2.5 days, according to the firm.

Oil prices are also getting a boost from Libya's low exports, triggered by disagreements over control of its central bank. United Nations-led discussions to end the deadlock have stalled, while "an imminent resolution to negotiations seems unlikely," Tretyakova wrote.

A 25-basis-point reduction in interest rates by the Federal Open Market Committee on Wednesday is currently "the more favored option," Tretyakova said, adding that the policy easing could bode well for oil demand.

"Markets are finely poised, and any geopolitical escalation, unplanned maintenance, project delays or weather-related events could shock the system," she wrote. "Existing supply disruptions are offsetting lingering demand growth concerns to some extent, but their influence is not fully reflected on prices yet."

Global oil prices are facing pressure from a "bearish" sentiment around demand growth in China, with fresh data indicating the longest industrial slowdown in that market since 2021, according to the note. "Diesel demand has been weak, dragging down refinery runs since February," Tretyakova said. "However, the current bearish outlook may be exaggerated, as lower oil prices could reduce (liquefied natural gas') competitiveness and support demand recovery."

Last week, the International Energy Agency cut its global oil demand growth outlook for this year. Separately, the Organization of the Petroleum Exporting Countries reduced its 2024 and 2025 oil demand projections.

Rystad expects global liquids and crude balances to remain "tight" through the end of the year despite ongoing concerns over lackluster demand. In 2024, world crude oil supply is likely to drop by 220,000 barrels a day from a year earlier amid extended cuts by the OPEC and its allies, or OPEC+, lowered production in Libya, and weaker performance from non-OPEC+ nations, the firm said.