Commodities

Oil eases after rally, decline in U.S. output limits losses

Reuters | Updated on September 09, 2021

Brent was trading down 18 cents, or 0.25 per cent to $72.42 a barrel.

SINGAPORE, Sept 9 (Reuters) - Oil prices ticked lower on Thursday, giving up some of the last session's gains although a decline in U.S. Gulf of Mexico output following Hurricane Ida provided a floor under the market.

Brent was down 18 cents, or 0.25 per cent to $72.42 a barrel at 0107 GMT and West Texas Intermediate (WTI) crude gave up 17 cents, or 0.25 per cent, to $69.13 a barrel.

"U.S. 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 per cent of U.S. 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 per cent of U.S. output.

U.S. crude oil production is expected to fall by 200,000barrels per day in 2021 to 11.08 million bpd, the U.S. 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 Sept. 3 was smaller than expected in a Reuters poll, but gasoline and distillate drawdowns were bigger than expected.

API data showed U.S. gasoline stocks fell by 6.4 million barrels for the week ended Sept. 3, while crude stocks dropped by 2.9 million barrels.

U.S. 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 engineerat each of the ports said, although other engineers said production at fields that supply the terminals was unaffected.

Published on September 09, 2021

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