Oil creeps up for second day after havoc of Hurricane Ida

Singapore — Oil prices rose for a second session on Thursday, recovering from earlier losses as a decline in US Gulf of Mexico output after damages from Hurricane Ida underpinned the market.

Brent added 23 US cents, or 0.32% to $72.83 a barrel at 2.21am GMT and West Texas Intermediate (WTI) crude rose 15c, or 0.22%, to $69.45 a barrel.

“US production is struggling to recover from Hurricane Ida,” ANZ said in a note. “Extensive damage to infrastructure and power outages mean Ida has knocked off more supply after nine days than any other storm.”

About 77% of US Gulf production remained offline on Tuesday, or about 1.4-million barrels per day (bpd). The market has lost about 17.5-million barrels of oil so far.

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

US crude oil production is expected to fall by 200,000 bpd in 2021 to 11.08-million bpd, the US Energy Information Administration (EIA) said on Wednesday, noting that Hurricane Ida should force a bigger decline than its previous forecast for a drop of 160,000 bpd.

American Petroleum Institute (API) data showed that crude drawdown for the week ended September 3 was smaller than expected in a Reuters poll, but petrol and distillate drawdowns were bigger than expected.

API data showed US petrol stocks fell by 6.4-million barrels for the week ended September 3, while crude stocks dropped by 2.9-million barrels.

US distillate stocks fell by 3.7-million barrels over the same week, API data showed.

On Wednesday, oil was also supported as protesters in Libya blocked oil exports at Es Sider and Ras Lanuf, an oil engineer at each of the ports said, though other engineers said production at fields that supply the terminals was unaffected. 

Reuters