Oil settles up 1% on low U.S. output after hurricane

0
26
imageCommodities6 hours ago (Sep 08, 2021 20:55)

© 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 Laura Sanicola

NEW YORK (Reuters) -Oil prices jumped on Wednesday and settled up more than 1% as U.S. Gulf of Mexico producers made slow progress in restoring output after Hurricane Ida.

Brent settled up 91 cents, or 1.3%, at $72.60 and U.S. West Texas Intermediate (WTI) crude settled up 95 cents, or 1.4%, to $69.30 a barrel.

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

About 77% of U.S. Gulf production remained offline on Tuesday, or about 1.4 million barrels per day (bpd). About 17.5 million barrels of oil have been lost to the market so far. [nL1N2Q21OI]

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.

Capacity of about 1 million barrels per day (bpd) 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.

Traders will be closely watching inventory data from the American Petroleum Institute industry group due later 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 they anticipate gasoline stocks were down by 3.6 million barrels and distillates down by 3 million barrels.

“It’s possible the loss of refining demand and the amount of crude oil might somewhat cancel itself out,” said Bob Yawger, director of energy futures at Mizuho.

The EIA said on Wednesday it expected U.S. crude oil production to fall by 200,000 barrels bpd to 11.08 million bpd in 2021, a bigger decline than its previous forecast for a drop of 160,000 bpd.

Prices were also supported as protesters in Libya blocked oil exports at Es Sider and Ras Lanuf, an oil engineer at each of the ports 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 jeopardizing 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.

Oil settles up 1% on low U.S. output after hurricane

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