Oil prices fell on Sept. 17 as more supply came back online in the US Gulf of Mexico following two hurricanes, but both benchmark contracts are on track to post weekly gains of around 4 percent as the recovery in output is seen lagging demand, Report informs referring to Reuters.
The price of a barrel of November futures for Brent oil amounted to $75.47 (0.26 percent decrease). A barrel of October futures for WTI crude was traded at $72.41 (-0.21 percent), according to Investing.com.
“Oil prices are slightly softer as offshore US production continues to slowly return and as the return of normal across large parts of Asia hit some road bumps and as some countries still struggle to contain the delta variant spread,” said Edward Moya, senior market analyst at OANDA.
Both contracts were on course to climb nearly 4 percent for the week as output in the US Gulf of Mexico has recovered more slowly than expected after Hurricane Ida damaged facilities in August and tropical storm Nicholas hit this week.
“Crude prices are having another good week despite broad weakness across commodities that stemmed from a resilient US dollar,” said Moya.
The dollar climbed to a three-week high on Sept. 17, making dollar-traded crude imports more expensive for countries using other currencies.
As of Sept. 16, about 28 percent of US Gulf of Mexico crude production remained offline, two-and-a-half weeks after Hurricane Ida hit.
“It’s still taking longer than people thought in terms of that coming back. That’s been a supportive factor in the market,” Commonwealth Bank commodities analyst Vivek Dhar said. “We’re going to go into more (supply) deficit conditions - that certainly seems to be the view.”
Preliminary data from the US Energy Information Administration showed US crude exports in September have slipped to between 2.34 million bpd and 2.62 million bpd from 3 million bpd in late August.
Dhar also pointed to data from the International Energy Agency this week showing OECD oil inventories falling to a low in November, as the recovery in fuel demand is expected to outpace supply.
The risk of weakened demand in Southeast Asia has abated as COVID-19 cases appear to have peaked in countries like Indonesia, Malaysia and Thailand, he said.