Oil settles down 1% as U.S. refineries shut; Washington pushes OPEC to pump more
Oil settled down 1% on Tuesday, posting its first monthly loss since March, as demand is expected to drop after Hurricane Ida shuttered U.S. Gulf refineries.
U.S. West Texas Intermediate (WTI) crude futures settled down 71 cents, or 1%, at $68.50.
Brent crude futures for October, due to expire on Tuesday, settled down 42 cents, or 0.6%, at $72.99 a barrel.
Both benchmarks posted their first monthly losses since March, even though they are not far from July highs. Brent lost 4% in July while U.S. crude fell 7%.
Hurricane Ida, which made landfall in the United States on Sunday as a Category 4 hurricane, knocked out at least 94% of offshore Gulf of Mexico oil and gas production and caused "catastrophic" damage to Louisiana's grid.
Prices were pressured by concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries.
About 1.7 million barrels per day (bpd) of offshore oil production was shut, but that output may resume more quickly than many refining operations along the Gulf that lost power. Analysts at FGE said in a Tuesday note they expect roughly three-quarters of offshore output to resume by the end of the week.
OPEC and allied producers in OPEC+ had agreed to add 400,000 bpd to monthly supply until the end of December. Sources told Reuters the group is likely to maintain that plan despite U.S. pressure for more output.
OPEC's own data showed the market will face a deficit until the end of 2021 but then flip into a surplus in 2022.
Reference: Reuters
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