Oil climbs on low U.S. output, disruptions in Libyan ports

0
17
imageCommodities10 minutes ago (Sep 08, 2021 14:51)

© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford

By Bozorgmehr Sharafedin

LONDON (Reuters) -Oil rose more than 1% on Wednesday as U.S. Gulf of Mexico producers made slow progress in restoring output after Hurricane Ida and protesters blocked exports from two Libyan ports.

Brent was up $1.06, or 1.5%, at $72.75 a barrel at 1340 GMT, and U.S. West Texas Intermediate (WTI) crude rose $1.18, or 1.7%, to $69.53 a barrel.

“Oil prices are continuing to find support from the ongoing high production outages in the Gulf of Mexico,” said Commerzbank (DE:CBKG) analyst Carsten Fritsch.

Producers in the Gulf are still struggling to restart operations nine days after Hurricane Ida swept through the region with powerful winds and drenching rain.

About 80% of U.S. Gulf production remained offline on Tuesday, with 79 production platforms still unoccupied. About 17.5 million barrels of oil have been lost to the market so far.

The Gulf’s offshore wells make up about 17% of U.S. output.

“Refinery operations appear to be making a quicker recovery,” ING analysts said in a note.

Only about 1 million barrels per day (bpd) of capacity was temporarily closed, down from a peak of more than 2 million bpd, ING said, citing the latest situation report from the Department of Energy.

“However, those refiners that have restarted are unlikely to be operating at full capacity at the moment,” the note added.

Traders will be closely watching inventory data from the American Petroleum Institute industry group due on Wednesday and the U.S. Energy Information Administration on Thursday for a clearer picture of the storm’s impact on crude production and refinery output. [API/S] [EIA/S]

Analysts polled by Reuters expect, on average, that crude stocks fell by 3.8 million barrels in the week to Sept. 3, and see gasoline stocks down by 3.6 million barrels and distillates down by 3 million barrels.

In Libya, protesters blocked oil exports at the ports of Es Sider and Ras Lanuf, an oil engineer at each port said, although other engineers said production at fields that supply the terminals was unaffected.

Meanwhile, the U.N. atomic watchdog criticised Iran for stonewalling an investigation into past activities and jeopardising important monitoring work, possibly complicating efforts to resume talks on reviving a nuclear deal.

The negotiations between world powers and Iran have been paused for almost three months since the election of a new radical president in Iran, reducing prospects of Tehran being able to resume oil exports.

“The Iran factor is therefore likely to be put on the back burner, at least for the time being. Iran is no longer the oil market’s wildcard but expect it to make a comeback in the early part of 2022,” said Stephen Brennock of oil broker PVM.

Oil climbs on low U.S. output, disruptions in Libyan ports

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

LEAVE A REPLY

Please enter your comment!
Please enter your name here