- Hurricane Ida impact cuts US supplies
- Focus on the outlook for OPEC and IEA demand
SINGAPORE, Sept. 13 (Reuters) – Oil prices rose for a second session on Monday as concerns over US production from damage from Hurricane Ida bolstered the market, along with expectations of higher demand .
Brent crude rose 33 cents, or 0.5%, to $ 73.25 a barrel, and U.S. West Texas Intermediate (WTI) crude also added 32 cents, or 0.5%, to $ 70.04 a barrel. 04:36 GMT. Both markets were at their highest since September 3 earlier in the session.
About three-quarters of the offshore oil production in the Gulf of Mexico in the United States, or about 1.4 million barrels per day, has been at a standstill since late August, roughly equal to what Nigeria produces , member of OPEC.
“To make matters worse, more oil refineries in Louisiana have resumed operations, increasing demand for crude oil,” ANZ analysts said in a note.
US refiners are recovering faster than oil production following the impact of Hurricane Ida, a reversal of past storm recoveries. Most of the nine Louisiana refineries affected by the storm restarted or are restarting on Friday. Read more
Royal Dutch Shell Plc (RDSa.L), the largest oil producer in the U.S. Gulf, on Thursday canceled some export shipments due to damage to offshore facilities from Hurricane Ida, reporting losses of energy would go on for weeks. Read more
However, the number of platforms in service in the United States has increased over the past week, energy service provider Baker Hughes said, indicating that production could increase in the coming weeks. Read more
Beyond the impact of Ida, market attention this week will focus on potential revisions to the oil demand outlook from the Organization of the Petroleum Developing Countries (OPEC) and the International Oil Agency. energy (IEA) as coronavirus cases continue to rise. OPEC will likely revise its 2022 forecast lower on Monday, two people familiar with the matter said. Read more
“It looks like oil prices may continue to drift within a consolidation range for now, between $ 70 and $ 75, as we mentioned earlier,” said Howie Lee, an economist at Singapore’s OCBC bank.
“Markets still need clarity on the impacts of the virus beyond the very short term and until we get that, it looks like most assets, including oil, could continue to drift sideways.”
Fund managers increased their net long positions in US crude futures and options during the week to September 7, the Commodity Futures Trading Commission (CFTC) said on Friday. [nAQN04MM2I]
Supply risks remain due to China’s planned release of oil from strategic reserves, while hopes of further negotiations on a broader nuclear deal between Iran and the West have been raised after The UN atomic watchdog struck a deal with Iran on Sunday on overdue maintenance of surveillance equipment to keep it running. Read more
China said on Monday it would announce details of planned sales of crude oil from strategic reserves in due course.
Reporting by Naveen Thukral and Florence Tan; Editing by Kenneth Maxwell and Christian Schmollinger
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