Oil climbs on low U.S. output after Hurricane Ida
Oil rose more than 1% on Wednesday as U.S. Gulf of Mexico producers made slow progress in restoring output after Hurricane Ida.
Brent advanced 1.27% to settle at $72.95 per barrel, and U.S. West Texas Intermediate crude climbed 1.39% to $69.3 per 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 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.
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.
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.
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.
Reference: CNBC
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