MOSCOW (MRC) -- Crude oil futures edged lower in mid-morning trade in Asia Sept. 17 amid profit-taking by investors after strong mid-week gains, and as markets assessed the prospect of returning supply in the US Gulf Coast and a fresh COVID-19 outbreak in China, reported S&P Global.
At 10:41 am Singapore time (0241 GMT), the ICE November Brent futures contract was down 16 cents/b (0.21%) from the previous close at USD75.51/b, while the NYMEX October light sweet crude contract was 15 cents/b (0.21%) lower at USD72.46/b.
Demand concerns have resurfaced as China battles a fresh outbreak of COVID-19 cases in southern Fujian province. The country's National Health Commission recorded 49 locally transmitted cases Sept. 15 and 50 the day before.
Supply from the US Gulf Coast was also gradually returning to normal after 95% of US Gulf oil and gas production was shut in late August due to Category 4 Hurricane Ida; 513,878 b/d of crude or 28.2% remained offline as of Sept. 16, according to the US Bureau of Safety and Environmental Enforcement.
"With the oil industry still recovering from Hurricane Ida, the arrival of Hurricane Nicholas this week stoked fears of further disruptions. However, that risk appears to have abated, with companies reporting little disruption in Texas," ANZ Research analysts said in a note.
Nonetheless, crude prices recorded strong gains mid-week, with both benchmarks on track to settle higher by at least 3.5% on the week.
Commercial crude oil stocks in the US have fallen for six straight weeks, with the most recent report from the US Energy Information Administration showing a 6.42 million-barrel draw to 417.45 million barrels last week. US crude oil stocks now looked set to push past pre-pandemic lows of 416.07 million barrels for 2019.
As informed earlier, Shell said earlier this month 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 then it was 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.
MRC