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Crude oil futures up in Asia as supply remains tight after Hurricane Ida

September 09/2021

MOSCOW (MRC) -- Crude oil futures were higher in midmorning Asia trade Sept. 9 as the market eyed a tightened supply outlook following Hurricane Ida, reported S&P Global.

At 11:08 am Singapore time (0308 GMT), ICE November Brent futures was 23 cents/b (0.32%) higher at USD72.83/b while the NYMEX October WTI contract was up 14 cents/b (0.20%) at USD69.44/b.

"Oil prices seem to be shrugging off the recent strength in dollar, suggesting that near-term focus continues to revolve around the pace of supplies' recovery from Hurricane Ida, along with the demand outlook for oil," IG Market Strategist Yeap Jun Rong told S&P Global Platts Sept. 9, adding that a delay in recovery efforts for oil production from the impact of Ida will serve to underpin prices in the near term.

Several analyst shared a similar sentiment, saying that crude oil prices gained as supply issues continued to plague the market.

US production is still struggling to recover from Hurricane Ida. The extensive damage to infrastructure and power outages mean Ida has knocked off more supply after nine days than any other storm.

After more than a week when the Category 4 storm ripped through the region, 77% of US Gulf of Mexico output remains shut, according to the Bureau of Safety and Environmental Enforcement as of Sept 8.

Elsewhere in Libya, protesters were blocking oil exports at the ports of Es Sider and Ras Lanuf, supporting oil prices.

"Compounding this was fears of supply disruptions in Libya. A fresh wave of protests at key oilfields and ports could reduce production as much as 800kb/d as protester shave halted operations and blocked tankers from loading as they seek the removal of key officials at the National Oil Corp," ANZ research analysts said in a note Sept. 9.

In inventory news, the US commercial crude stocks declined 2.88 million barrels in the week ended Sept. 3, the American Petroleum Institute said Sept. 8.

As informed earlier, Shell said it observed damage from Hurricane Ida to its transfer station West Delta-143 offshore facilities in the Gulf of Mexico. West Delta-143 serves as the transfer station for all production from its assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals. Shell said it is not yet safe to send personnel offshore to learn the full extent of the damage and estimate the effect on production.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
Author:Margaret Volkova
Tags:Asia, crude and gaz condensate, Shell, USA.
Category:General News
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